The National Mineral Policy (NMP)

Important Points:
 The NMP was first formulated in 1993
 The Union Cabinet recently approved the National Mineral Policy, 2019 (NMP 2019)
 National Mineral Policy, 2019 (NMP 2019), proposes to grant status of ‘industry’ to
mining activity

Prepare Key Features of the National Mineral Policy, 2019 (NMP 2019)

The policy means rules, regulations, principles and procedures laid down by government for
regulating, developing and controlling the respective sectors in the country. It is generally
directed to achieve particular objectives and provides a framework to enhance the industry's
competiveness. The policy document is comprehensive covering all the key aspects for the
development of mining sector. The policy flows out of an intensive consultation process with all
stakeholders. It provides guidance and advice to different authorities and the mineral industry. It
addresses the challenges and responds to important government commitments. The economic
development of a country depends on the quality of its policy framework, the decisions taken,
especially the processes involved in formulating each decision. So, policies should be so formulated
as to secure equitable distribution of wealth. To harness their respective mineral wealth, each nation
formulates a policy for exploration, exploitation and consumption of their mineral resources depending
upon their geo-political situation, priorities and preferences. Despite of this India, by and large, failed to
realize its potential of mineral industry for trade and playing crucial role in the geo-politics. This could be
seen from the fact that first full-fledged national mineral policy was enforced in 1993.

The National Mineral Policy (NMP) is necessary to guide the government on policy issues. The policy
constitutes a formal framework through an extensive consultation process to develop mineral sector
within the national strategy to overcome the major barriers in the mineral sector, contribute
significantly to its national social and economic growth and maximize the economic and social benefits
of mineral exploration. It presents the objectives, strategies, research and development and fiscal
aspects, which are aimed at creating favorable environment to regularize mining activities and mineral
sector and progressively contribute towards national development. First NMPcame into effect in 1993,
which was modified in 2008, The Union Cabinet recently approved the National Mineral Policy, 2019
(NMP 2019)

National Mineral Policy, 1993

The NMP was first formulated in 1993 with an aim to liberalize the mining sector. The NMP-1993 was
intended to create an environment to encourage the private investment and introduction of state of the
art technology in exploration. The policy stressed the formulation of legal measures for the regulation of
mines and development of mineral resources, which ensures the basic uniformity in mineral
administration. The main thrust of the policy was to develop mineral resources in consideration with the
national and strategic position to ensure their adequate supply and to meet present and future
demands. It stimulates necessary links for the even development of mineral sector and to create
conducive economic environment (Ministry of Mines, 1993). In order to fulfill the objective of NMP-
1993, MMRD act was again amended for greater emphasis on development. Likewise MCR-1960 and
MCDR-1988 were also amended for decisive implementation of NMP.

However, due to lack of consistency in demand, changing and increasing needs posed a massive
challenge for India, which had to ensure proper assessment of its mineral resources and also to ensure
regular external supply. Subsequent demands raised the need of new comprehensive mineral policies to
anticipate emerging issues and to achieve optimum sustainable management of domestic geological.
Resources. Economic growth corresponds to a higher need of mineral resources. Though the guiding
principles of the mineral sector had been improved with the introduction of the NMP-1993, the overall
regulatory framework required further improvements. Such changes were required to enhance its
coherence to adequately meet the overwhelming needs and to upgrade the mining sector in the view of
changing global trends. So there was a need to review and strengthen the legal, fiscal and
environmental aspects of the regulatory framework.

National Mineral Policy, 2008

The NMP-1993 for 'non-fuel' and 'non-coal' minerals amended in 2008 had its primary objective of
achieving zero waste mining and ensuring technology up-gradation for development of domestic
mineral resources. This policy was a blueprint for large scale privatization and Foreign Direct Investment
(FDI) in mining. It was the pretext for a series of measures in succeeding years to open up the sector to
the private sector and FDI. NMP-2008 emphasized the need to develop a Sustainable Development
Framework (SDF) as recommended by the High-level Committee (Hoda Committee) in the context of
India's mining environment for optimum utilization of the country's natural mineral resources. NMP-
2008 had also extended the scope of developmental framework by directing better management of
resources in this sector. NMP-2008 observed that the guiding strategy for development of any mineral
should be market oriented that consider its ultimate end users in terms of demand and supply in the
short, medium and long term basis (Ministry of Mines, 2015). However, a mineral specific strategy
would be developed to maximize gains from the comparative advantage by which the national and
mineral development would be prioritized in terms of import, export and production value (Ministry of
Mines, 2008).

The focus of NMP-2008 was to make the regulatory environment in the mining sector conducive to
private investments. It had concluded that mineral wealth is a major resource for development and its
economical and timely use bears national importance. So sharing of the wealth accrued from mining
activities was extremely important with consideration of this fact that India's most mineral rich states
and districts have high levels of poverty. Therefore, Mines and Minerals (Development and Regulation)
bill (prepared on the basis of the policy direction set forth in NMP-2008 and the recommendation of
Hooda Committee) was aimed at doing justice to tribal people of areas where mining could be carried
out.

National Mineral Exploration Policy, 2016

The necessity for the formulation of new National Mineral Exploration Policy (NMEP) was that, the
mineral sector was facing the challenges posed by increasing demand and shrinking mineral resources
world over. Although the existing regulations and institutions needs reform to deliver better results on
the ground for sustainable mining future, balancing the needs of the people, the environment and the
economy were equally important factors. A Sustainable Development Framework for Indian mining
sector was developed in 2011 in an attempt to position the sector in the framework of sustainability;
considering economic, environmental and social aspects. In the light of recent political and
environmental changes, India had advanced the mineral policy framework by introducing NELP, which
has major emphasis on the exploration strategies.

National Mineral Policy, 2019 (NMP 2019)

The Union Cabinet recently approved the National Mineral Policy, 2019 (NMP 2019). This
policy aims to ensure effective regulation and sustainable development of the mining sector.

Key Features of the Policy

The policy proposes to grant status of ‘industry’ to mining activity to boost financing of mining
for private sector.

It focuses on use of coastal waterways and inland shipping for evacuation and transportation of
minerals and also encourages dedicated mineral corridors to facilitate the transportation of
minerals.

It also makes efforts to harmonize taxes, levies & royalty with world benchmarks to help private
sector.

The Policy also mentions rationalizing reserved areas given to PSUs which have not been used
and opening these areas to auction, which will give more opportunity to private sector for
participation.

It encourages the private sector for taking up the exploration.

It even mentions that long term import export policy for mineral will help private sector in better
planning and stability in business.

It also provides for maintenance of database of mineral resources and tenements under mining
tenement systems.