Amendments in Indian Mineral Policies so far.....

Lists:

1. Imposition of condition under Rule 27(3) of the Mineral Concession Rules, 1960, in all mining leases for major minerals (excluding coal minerals)

1. Imposition of condition under Rule 27(3) of the Mineral Concession Rules, 1960, in all mining leases for major minerals (excluding coal minerals)

Reference: File. No. 10/75/2008-MV, GOI, Ministry of Mines, New Delhi, dated 23rd December 2010.

Referring to Rule 27(3) in Mineral Concession Rules (MCR), 1960, framed under sub-section (2) of Section 13 of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), and to the United Nations Framework Classification (UNFC) for minerals, adopted by the Government, and wherein the Indian Bureau of Mines (IBM) issued detailed guidelines on reporting resources and reserves in the UNFC system in the year 2003 in the Mineral Conservation and Development Rules, 1988. The Government has recently reviewed the progress in the reporting of the mineral resources and reserves in the country and it has been observed that while the prospecting work conducted after the issue of guidelines in 2003 have been largely reporting the exploration data in terms of the UNFC, several mining leases granted in the country prior to the year 2003 have yet to assess the resources and reserves in their mines in terms of the UNFC guidelines. It has been further observed that in many of the areas reserved for Public Sector Undertakings under Section 17A of the MMDR Act, the resources and reserves are yet to be assessed in terms of UNFC guidelines. This gap in the information, while leading to incomplete assessment of the resources and reserves in the mining leases granted in the country, also does not allow the Government to make a proper assessment of the exploration work that still remains to be done in the mining lease areas by the lease holders. Accordingly, in exercise of the powers under Rule 27(3) of the MCR, I am directed to convey the directions of the Central Government that the State Government shall impose a special condition in all the existing and future leases in the country for major minerals (excluding coal minerals) as follows:

The owner of a mining lease shall:

a) Ensure that prospecting work is carried out in his lease area at his own cost in such mining lease where

1. Prospecting has not been done and a Prospecting Report has not been
   filed with the Indian Bureau of Mines;
2. The Prospecting Report for the mining lease has been prepared in terms of standards that are materially different or incompatible with UNFC standards;
3. Fresh prospecting work has become necessary for such minerals for which the threshold values have been revised by the Indian Bureau of Mines; and
4. Fresh prospecting is required to prove the depth persistency of the ore or mineral deposit;

b) Ensure that prospecting work, if required under clause (a) above, shall be completed as per the time-schedule given below:

S. No	Item	Time limit
1	All mining lease with an area of less than 10 hectares.	Within one year of the imposition of the condition in the mining lease.
2	All mining leases with an area more than 10 hectares and less than 50 hectares.	One half of the area within one year of the imposition of the condition in the mining lease and remaining half of the mining lease area within three years of imposition of condition in the mining lease.
3	All mining leases with an area of more than 50 hectares.	The mining lease area to be equally demarcated for prospecting work such that all the prospecting work is completed in a period of five years from the date of imposition of the condition in the mining lease.

c)  Submit:

        i.            Yearly report on the progress in the prospecting work along with the expenditure details and a copy of the interim Prospecting Report, where the prospecting Report is for a part area (as at serial number (2) and (3) of the sub-clause (b) above; and

      ii.            Complete Prospecting Report with a feasibility report at end of the prospecting Report, to the Chief Controller of Mines, Indian Bureau of Mines, and concerned State Government”.

All the State Governments are requested to insert the above mentioned condition under Rule 27(3) of the Mineral concession Rules, 1960, and send a copy of the modified lease agreement to the Chief Controller of Mines in the Indian Bureau of Mines, and report action taken on six-monthly basis to the Ministry for review in the Central Coordination-cum-Empowered Committee meetings.

INDIAN CLASSIFICATION SYSTEM: Updating to UNFC

This is just a complied extract of the published work...sharing for information purpose only...

1. INDIAN SYSTEM: Prior to 1981, there was no nationally accepted system in India. Different agencies followed different system like USGS, Russian etc. In 1981, a system was standardized which underwent minor modifications later on to fit in with the practical data collected for the National Mineral Development database of IBM. This system is schematically shown as follows:

Figure 1: Earlier Classification (as shown in KK Chatterjee document)

As can be seen, the system is 2-dimensional, with no distinction between technical and economic, and with an emphasis on geological axis. The parameters are also very few and, to a great extent, subjective. For geological axis the parameters are primarily spacing of the observation points (e.g. boreholes, pits, and trenches), scale of geological maps, and inferences drawn therefrom. The techno-economic parameters are grade, amenability to beneficiation, thickness and depth (more particularly in case of coal) and some general conditions of constraints of environment, forest, market etc. After a laborious and prolonged effort comprising training, conferences and interactions through the instrument of national mineral inventory, this classification system percolated down to the level of individuals and organizations concerned with exploration, mining, planning and administration in the mineral sector of India, and now, since 1981, are firmly entrenched in the Indian mindset.

2. UNFC System: UNFC is a 3D (3 dimensional) system, the 3 axes being Economic, Feasibility and Geological. The categories of resource estimation are denoted by EFG digital codes as follows.

Axis	Economic Axis (E)
Category	Economic	Potentially Economic		Intrinsically Economic
Code	1	2		3
Axis	Feasibility Axis (F)
Category	Feasibility Study & Mining Report		Pre-Feasibility Study	Geological Study
Code	1		2	3
Axis	Geological Axis (G)
Category	Detailed Exploration	General Exploration	Prospecting	Reconnaissance
Code	1	2	3	4

Thus, the codes of categories can vary from the highest (111) to the lowest (334). The standard terms along with their codes are as follows.

Terms and Codes in UNFC
S. No.	Category description	Reserve/Resource	EFG Code
1	Mineral Reserve (economically mineable part of measured/indicated mineral resource	Proved	(111)
		Probable	(121) & (122)
2	Total Mineral Resource(Intrinsic economic interest, reasonable prospect for eventual economic extraction)	Measured	(331)
		Indicated	(332)
		Inferred	(333)
3	Feasibility mineral Resource		(211)
4	Pre-feasibility mineral Resources		(221, 222)
5	Reconnaissance Resource		(334)

The UNFC system is relatively more objective, and because of the use of numerical codes, it is independent of language or country barriers, and hence, globally understandable.

3. Relationship between Indian and UNFC systems: In both systems, there are 8 standard terms used as follows.

Terms used
Indian System	UNFC System
Proved In-situ reserve	Proved reserve
Proved recoverable reserve	Probable reserve
Probable in-situ reserve	Measured resource
Probable recoverable reserve	Indicated resource
Possible in-situ reserve	Inferred resource
Possible recoverable reserve	Feasibility resource
Prospective resource	Prefeasibility resource
Conditional resource	Reconnaissance resource
(Note: no one to one correlation between both systems)

But since the practical parameters are different, there is no simple one-to-one correspondence between the terms of the two systems.

4. Implementation of UNFC System in India

4.1. Decision making process: Both the Government and the mineral industry of India were represented in the Geneva Conference of the United Nations Economic Commission for Europe (UNECE) in November, 1999 where the decision for adoption and implementation of UNFC was finally taken after completion of a trial period. After that, the Government took a decision in principle to implement UNFC in India in view of the already started process of liberalizing the Indian mining industry and opening it up to multinational investors for exploration and mining, for which India needed capital and technology. At the same time, it was considered necessary to project a relatively more realistic and objective picture of India’s known mineral resource inventory. Further, in view of the prevailing system of a large number of geologists and mining engineers belonging to thousands of agencies independently engaged in resource estimation in India, it was thought that the broad exploration guidelines of UNFC may leave a wide scope of varying interpretation and that a set of practical field guidelines in quantitative terms needed to be standardized. So, in May, 2000 the Ministry of Mines (MOM), Government of India constituted a Task Force to formulate field guidelines for exploration as per UNFC, the report of which was submitted in August, 2000.

For the purpose of these guidelines, mineral deposits were grouped into 7 types as follows.

1.    Stratiform, stratabound and tabular deposits of regular habit

2.    Stratiform, stratabound and tabular deposits of irregular habit

3.    Lenticular bodies of all dimensions including bodies occurring en-echelon, silicified linear zones of composite veins

4.    Lenses, veins and pockets; stock-works, irregular shaped, modest to small size bodies

5.    Gem stones and rare metal pegmatites, reefs and veins

6.    Placer and residual mineral deposits of hill and valley wash

7.    Dimension stones

Further, within the broad guidelines of UNFC, micro-level parameters were also identified for application in India. These parameters are:

a) Economic viability: Detailed geological knowledge, mining report/plan, specific end use grade reserves, forest/non-forest and other land-use data.

b)  Feasibility study: Geological study including infrastructure, meteorology and ecology aspects; mining plans including issues pertaining to methods, recovery, manpower; environmental study including baseline data generation and impact analysis; beneficiation studies at laboratory, pilot plant and industrial scales; analysis of both capital and operational costs; analysis of needs of infrastructure, construction and services; marketing analysis covering demand-supply and industry structure; cash flow forecasts; issues related to labor, land, mining and taxation.

c) Geological exploration: Aerial reconnaissance by remote sensing and airborne geophysical survey; geological mapping; geochemical survey covering analysis of samples, geomorphology, drainage and vegetation; ground geophysical survey; pitting, trenching, drilling and sampling; petrographic and minerographic studies; rock mechanics studies (for dimension/building stones).

Depending on the type of mineral deposit, the quantum/level of work/analysis/study under these parameters the category of resource estimate may vary.

These Guidelines were thoroughly discussed during and after a seminar organized in Agra, India, under the aegis of UNECE, MOM and the Federation of Indian Mineral Industries (FIMI), and thereafter these were widely circulated to all the agencies concerned with resource estimation/evaluation: both in the Government and in the private sector. The final version of the Guidelines was submitted to the Government in February, 2001.

In May, 2001, the Government of India took the decision in favor of doing away with the Indian system of resource classification system and implementation of UNFC in India. After a prolonged consultation at different levels on the modalities of implementation, the decision was taken to the political level conference of the Central Government and all the State Government ministers of mines in January, 2003, wherein the final stamp of approval has been given. Thus the decision making process at all the 3 levels: technical, administrative and political has been completed.

4.2. Strategy of implementation: The strategy of implementation as finalized by the Government of India mainly consisted in:

1.      Conversion of the National Mineral Inventory database of IBM covering over 16000 deposits/leases/mines of 64 non-coal solid minerals, from Indian system to UNFC system.

2.      Ensuring future resource estimation data generation as per UNFC through

a.       exploration according to the field guidelines as per UNFC, in both freehold and leasehold; and

b.      Amendment of the Mineral Conservation & Development Rules (MCDR) to make it statutorily obligatory for all non-coal major solid mineral mines to report to IBM, resource data classified as per UNFC system.

The non-coal solid mineral inventory database of IBM is presently available here is as on 1.4 2000 incorporating the knowledge of all mineral deposits accrued till this point of time throughout the past, and it will be updated regularly, and it was due for next (from current 1.4.2000 database)updation as on 1-4-2005(status of this updation need citation). Digging out old exploration reports and re-evaluating those data deposit by deposit or mine by mine would be an unpractical approach. So, a practical approach has been adopted. To begin with, a simple conversion table (Appendix-1) has been devised on the basis of experience of handling the data and after analyzing their nature. The idea is that the present database should get converted on one time basis albeit not with 100% accuracy, but with successive updating’s based on progressive exploration in more and more of the already identified and documented deposits/mines, the accuracy will keep improving. It is expected that after a few updating’s, the accuracy will reach near perfection. In India there are many traditional small mines (e.g. bentonite, stones, clays etc.) where no geological exploration nor any feasibility nor prefeasibility study has ever been carried out, yet their economic viability is beyond doubt, since the mine owners are mining, selling and earning profit on their products. In such case "extended codes” of UNFC will apply (e.g. 133). The impact of the conversion to UNFC on the inventory as on 1-4-2000 has been studied for 4 minerals namely copper, lead-zinc, chromite and rock phosphate, which is shown in Appendix-2. It can be seen that large parts of hitherto reported “reserve” as per Indian system are now relegated to “resource” after implementation of UNFC system. So far as coal and lignite are concerned, the GSI has taken initiative for implementing UNFC.

Secondly, for ensuring future exploration as per UNFC guidelines in both freehold and leasehold areas, it has been planned that IBM would organize extensive training programmes on field guidelines at different centers across the country targeting geologists and mining engineers of various Central and State Government organizations, and of the industries. Subsequently, GSI and some other organizations would also conduct their in-house training programmes in association with IBM.

Thirdly, for ensuring implementation of UNFC in non-coal major mineral leasehold areas, it has been decided by the Government to amend the Rules making it statutorily obligatory for all mine owners, to comply. They are required to report to IBM every month as well as annually, the information on the balance reserves available in their respective leases.

5. Conclusions

The whole process of decision making on adoption and implementation of UNFC in India has been through the period from November, 1999 to January, 2003. Summing up, the following points stand out prominently

1.       India is a large, democratic and populous country with mineral resource data being generated continually at thousands of centers.

2.       In the same deposit, more than one agency may explore at the same time or the same agency may explore at different times, with a possibility that resources may be estimated under different categories in different parts of the same deposit. The process is dynamic.

3.       Mineral administration and legislative system in India is complex, with authorities vested on a large number of Central and State Government ministries and departments. There is also a multiplicity of laws for regulation of mining related activities.

4.       Strategies for tackling past data contained in the national mineral inventory and for future exploration in freehold and leasehold areas have been formulated.

5.       With a view to minimizing scope of variation in interpretation of the broad guidelines of UNFC by thousands of geologists and mining engineers independently generating resource estimation data, different sets of practical field guidelines in quantitative terms have been standardized for different types of mineral deposits.

6.       For promoting practice of the new guidelines, a mixed approach consisting of extensive training and amendment of law has been adopted.

7.       The entire process of implementation has been steadily and systematically institutionalized at all 3 levels — technical, administrative and political.

As in April, 2003, considerable progress has been achieved in case of non-coal non-atomic solid minerals. For coal and lignite also, initiative has already been taken. For petroleum, natural gas and atomic minerals, there is no report of progress, if any.

The impact of the changeover from Indian to UNFC system on the national mineral inventory is expected to be downward and very significant. This is expected to serve not only to project a more realistic picture of India’s mineral resources, but also, in some cases, to rouse the planners from a sense of complacency. New thrust areas of exploration in already explored as well as virgin areas can now be planned on a sound basis; export and other mineral related policies can now be reframed on the basis of a more realistic knowledge base; and future exploration activities can now be streamlined.

Appendix 1

Table 1 Conversion table for national mineral inventory database

Status of estimation of resource	Category of resource as per Indian system	UNFC Code	Remark
A. Freehold deposit
Grade of reserve Classified	Proved in-situ reserve Probable in-situ reserve Possible in-situ reserve	222 221 333	Equivalent of pre-feasibility study leading to classification of economic grade
Grade of reserve unclassified	Proved in-situ reserve Probable in-situ reserve Possible in-situ reserve	331 332 333
Conditional resource with grade classified	Proved resource Probable resource Possible resource	331 332 333
Conditional resource with grade unclassified	Proved resource Probable resource Possible resource	331 332 334
B. Leasehold area
(a) Working mines
Grade of reserve Classified	Proved recoverable reserve Probable recoverable reserve Possible in-situ reserve	111 122 333	Mine owner selling and earning profit
Grade of whole reserve unclassified	Proved recoverable reserve Probable recoverable reserve Possible in-situ reserve	111 122 333	Mine owner selling and earning profit
Grade of part of reserve unclassified	Proved in-situ reserve Probable in-situ reserve Possible in-situ reserve	211 222 333	Mining may be in one part, but economic viability of remaining part uncertain
(b) Temporarily idle mines
Grade of reserve Classified	Proved recoverable reserve Probable recoverable reserve Possible in-situ reserve	121 122 333	Mine owner already sold and earned profit
Grade of whole reserve unclassified	Proved recoverable reserve Probable recoverable reserve Possible in-situ reserve	121 122 333	-do-
Grade of part of reserve unclassified	Proved in-situ reserve Probable in-situ reserve Possible in-situ reserve	221 222 333	Mining might have been in one part, but economic viability of remaining part uncertain
(c)Mining not commenced
Grade of resource classified	Proved in-situ reserve Probable in-situ reserve Possible in-situ reserve	221 222 333	Economic viability not yet proven through actual sale and profit
(d) Conditional resource
Grade classified or unclassified	Proved in-situ reserve Probable in-situ reserve Possible in-situ reserve	331 332 333

Appendix 2

Table 2 Impact of UNFC on National Mineral Inventory as on 1-4-2000

Reserve/Resource	Indian System		UNFC System
	Category	Quantity	Code	Quantity
Copper ore
Reserve	Proved, Probable & Possible	713 MT	111, 121, 122	290 MT
Resource	Conditional resource	722 MT	221, 222, 331, 332, 333, 334	1049 MT
Lead-Zinc ore
Reserve	Proved, Probable & Possible	231 MT	111, 121, 122	101 MT
Resource	Conditional resource	280 MT	221, 222, 331, 332, 333, 334	384 MT
Chromite
Reserve	Proved, Probable & Possible	114 MT	111, 121, 122	47 MT
Resource	Conditional resource	73  MT	221, 222, 331, 332, 333, 334	132 MT
Rock Phosphate
Reserve	Proved, Probable & Possible	193 BT	111, 121, 122	74 BT
Resource	Conditional resource	122 BT	221, 222, 331, 332, 333, 334	207 BT
	MT- Million tons	BT- Billion tons