Complete information on National Mineral Development Policy (India)


After attaining Independence the Govern­ment of India adopted new mineral policy with main objective of exploiting the mineral resources of the country to promote modern industrial development.

It formed part of the Industrial Policy Resolution of 1948 and 1956 which stipulated that some of the mineral raw materials that are needed by the industry and for which large investments and advanced tech­nology are required, must be placed under the super­vision of the Central Government.

Accordingly the Central Government became responsible for the exploitation and development of such minerals like hard coal, brown coal, petroleum and natural gas, iron ore, manganese, chromium, sculpture, gold, dia­mond, copper, lead, zinc, molybdenum, tungsten, nickel, platinum, and nuclear fuels.


All other raw materials apart from ‘minor minerals’ are to be gradually taken over by the state. Foreign collabora­tion in the public and private sectors was limited to certain areas of the mineral resource development. The mineral policy was based on the following assumptions-

(a) The mineral wealth of the country is a natural resource, limited and non-renewable.

(b) It is required for developmental and stra­tegic needs of the country.

(c) Its exploitation should strike a balance between the immediate needs of the present genera­tion and those of the future generations.


(d) It should meet the requirements of conser­vation and environment. Accordingly a number of organisations like the Coal India Ltd. (CIL), Oil and Natural Gas Commission (ONGC), National Min­eral Development Corporation (NMDC), Hindustan Copper Ltd. (HCL, 1967), and Hindustan Zinc Ltd. (HZL, 1966), Bharat Gold Mines (1972), Uranium Corporation of India, Bharat Aluminum Co. Ltd. (BALCO, 1965) and National Aluminum Co Ltd. (NALCO, 1981), Mineral Exploration Corporation Ltd. (1972), National Coal Development Corpora­tion (1956), Materials and Metals Trading Corpora­tion (1956), and Indian Bureau of Mines (IBM) etc. were set up for prospecting and development of mineral resources of the country.

This mineral policy governing the extraction and export of mineral resources of the country was broadly successful. Under the policy the Govern­ment had strict control over the extraction and export and in certain cases; the Government had reserved for itself the exclusive ownership and extraction.

New Mineral Policy, 1993

Under the new liberal policy in industry, trade and finance need was felt to liberalise the mineral sector and open it for private investors to promote better mineral development. Consequently new min­eral policy has been introduced in 1993.


The major objectives and guidelines for this new mineral policy are as follows-

(1) To explore for identification of mineral wealth in the land and offshore areas. Under the new mineral policy, the Government will continue ex­ploration of the mineral wealth of the country wherein special attention would be paid for the development of: (a) strategic minerals, (b) those minerals in which India has poor or just adequate resource base, and (c) those minerals which are required for elec­tronic and other high-tech industries.

(2) To develop mineral resources taking into account the national and strategic considerations; the strategy of development would ensure: (a) a regular supply of mineral raw materials for indus­trial production; (b) exploration and supply should keep the present needs as well as future long-term needs of the country; (c) adoption of efficient meas­ures of processing of minerals and effective meas­ures for conservation; and (d) adoption of scientific methods of exploration.

The new mineral policy invites foreign equity and technology participation in exploration and min­ing of high value scarce minerals. Joint ventures with Indian and foreign equity participation would be encouraged. The Government would also grant mineral concessions for small deposits in scheduled areas to scheduled tribes.


(3) To minimise adverse effects of mineral development on the forests, environment and ecol­ogy through appropriate protective measures. The new policy takes a comprehensive view to facilitate the choice or order of land use keeping in view the needs of development as well as the needs of protect­ing the environment.

Under the new policy the prevention and mitigation of adverse environmental effects due to mining and processing of minerals and repairing and revocation of the affected forest area and land covered by trees in accordance with the prescribed norms and established forestry practices shall form integral part of mine development strat­egy in every case.

Under the new policy, operations will not ordinarily be taken up in identified ecologically fragile and biologically rich areas. No mining lease will be granted to any party-either private or pub­lic-without a proper mining plan, including the environmental management plan approved and en­forced by statutory authorities.

Such plan should adequately provide for controlling the environmen­tal damage, restoration of mined areas and for plant­ing of trees according to the prescribed norms. As far as possible, reclamation and a forestation should proceed concurrently with mineral extraction. Ef­forts will be made to convert old disused mines into forests and other appropriate forms of land use.


(4) To promote foreign trade in minerals. Minerals have been an important source of foreign exchange earnings. The policy of export of minerals will keep in view: (a) the mineral inventory position, and (b) long term needs of the country. As far as possible, efforts will be made to export minerals in value added form,

(5) To promote research and development in minerals. The new mineral policy emphasises the promotion of research and development, technology up gradation, research in mining methods, develop­ment and processing.

The new mineral policy of 1993 makes a significant departure from the exclusive control of the Government on the exploration and exploit of major minerals and allowing domestic and enterprises to step in and make investment promote mining and processing activities. This vitiation has inherent dangers of overexploitation neglect of environment and serious damage to long term national interest of the country. The psychology of the private investor is to more and more profit with lower investment. They may cause a number of economic, social and environmental problems.

The new policy should ha adequate provision to avoid such problems. It should make obligatory for foreign exchange earner a profit maker to invest a part of their earning a; profit in welfare schemes and infrastructural development.

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