State mining commitments: the emerging legal trend

Mines and minerals constitute national wealth and are vital raw material for infrastructure, capital goods and basic industries. Their conservation, preservation and intelligent use is necessary in view of the public interest involved and companies’ intense drive to exploit them. To achieve this objective, certainty about the binding nature of states’ commitments and a transparent regulatory regime is essential.

Indian regulatory framework

Under article 39(b) of Directive Principles of State Policy, states shall, in particular, direct their policy towards securing that the ownership and control of the material resources of the community are distributed as best to sub-serve the common good. Under article 39(c), the states must ensure that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.

The public interest is writ large in the provisions of the Mines and Minerals (Development and Regulation) Act, 1957. Section 2 of the act declares that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent provided in the act. The act’s preamble states that it is “an Act to provide for the development and regulation of mines and minerals under the control of the Union”.

Ranjana Roy Gawai is the managing partner and Safeena Mendiratta is a senior associate at RRG & Associates.