CHAPTER III (MINERAL CONCESSION RULES, 1960)

As Amended upto 18.01.2000 CHAPTER III

Grant of prospecting licences in respect of land in which the minerals vest in the Government


8. Applicability of chapter II, chapter III and chapter IV. The provisions of chapter II, chapter III and chapter IV shall apply to the grant of reconnaissance permits as well as grant and renewal of prospecting licences and mining leases only in respect of the land in which the minerals vest in the Government of a State.

Application for prospecting licence and its renewal.

  1. An application for prospecting licence and its renewal in respect of land in which the minerals vest in Government shall be made to the State Government in Form B and Form E respectively through such officer or authority as the State Government may specify in this behalf.
  2. Every such application shall be accompanied by
    1. a non-refundable fee calculated in accordance with the provisions of Schedule II ; and
    2. (Omitted)
    3. (Omitted)
    4. a valid clearance certificate, in the form prescribed by the State Government , of payment of mining dues, such as royalty or dead rent and surface rent payable under the Act or the rules made thereunder, from that Government or any officer or authority by that Government in this behalf;

      Provided that in case the applicant is a partnership firm or a private limited company such certificates shall be furnished by all partners of the partnership firm or, as the case may be, all members of the private limited company.

      Provided further that where any injunction has been issued by court of law or any other competent authority staying the recovery of any such mining dues or income tax, non payment thereof shall not be treated as a disqualification for the purpose of granting or renewing the said prospecting licence:

      Provided that where a person has furnished an affaidavit to the satisfaction of the State Government stating that he does not hold and has not held a prospecting licence, it shall not be necessary for him to produce the said valid clearance certificate:

      Provided further that a sworn affidavit stating that no dues are outstanding shall suffice subject to the condition that the certificate required as above shall become invalid if the party fails to file the certificate within the said ninety days.
    5. an affidavit stating that the applicant has
      1. filed up-to-date income tax returns;
      2. paid the income tax assessed on him ; and
      3. paid the income tax on the basis of self-assessment as provided in the Income Tax Act ,1961;
    6. an affidavit showing particulars of areas mineral-wise in the State, which the applicant or any person jointly with him
      1. already holds under a prosecuting licence;
      2. has applied for but not granted; and
      3. being applied for simultaneously.
    7. a statement in writing that the applicant, where the land is not owned by him, has obtained surface rights over the area or has obtained the consent of the owner for starting prospecting operations:

      Provided that no such statement shall be necessary where the land is owned by the Government.

      Provided  that the consent of the owner for starting prosecuting operations in the area or part thereof may be furnished after execution of the prosecuting licence but before entry into the said area.

      Provided further that no further consent would be required in the case of renewal where consent has already been obtained during grant of the licence.

  3. The State Government may, for reasons to be recorded in writing, relax the provisions of clause (d) of sub-rule (2) of rule 9.
  4. The grant of clearance certificate under clause (d) of sub-rule (2) of rule 9 shall not discharge the holder of such certificate from the liability to pay the mining dues which may subsequently be found to be payable by him under the Act or the rules made thereunder.

10. Acknowledgement of application.

  1. Where an application for the grant or renewal of a prospecting licence is delivered personally, its receipt shall be acknowledged forthwith.
  2. Where such application is received by registered post, its receipt shall be acknowledged on the same day.
  3. In any other case, the receipt of such application shall be acknowledged within three days of the receipt.
  4. The receipt of every such application shall be acknowledged in Form D.

10A. (Omitted).

11. Disposal of application for the grant and renewal of prospecting licence.

  1. (Omitted)
    1. An application for the renewal of a prospecting licence shall be made at least ninety days before the expiry of the prospecting licence and shall be accompanied by
      1. a statement relating to the prospecting operations already undertaken by the applicant;
      2. the amount of expenditure incurred;
      3. the numbers of hours and days for which the work was undertaken; and
      4. the period which is required to complete the prospecting work.
    2. An application for the renewal for a prospecting licence shall be disposed of by the State Government before the expiry of the period of prospecting licence and if the application is not disposed of within that period, the licence shall be deemed to have been renewed for a period not exceeding the period prescribed for renewal of prospecting licence under sub-section (2) of section 7 of the Act, or the period for which an application is made, whichever is less.
  2. The State Government may, for reasons to be recorded in writing and communicated to the applicant , at the time of renewal, reduce the area applied for.
  3. The State Government may condone delay in submission of an application for renewal of a prospecting licence made after the time limit prescribed in sub-rule(2) provided the application for the renewal has been made before the expiry of the licence.

12. Refusal of application for a prospecting licence.

  1. (1) The State Government may, after giving an opportunity of being heard and for reasons to be recorded in writing and communicated to the applicant, refuse to grant or renew a prospecting licence over the whole or part of the area applied for.
    1. An application for the grant or renewal of a prospecting licence made under rule 9 shall not be refused by the State Government only on the ground that Form B or Form E, as the case may be, is not complete in all material particulars, or is not accompanied by the documents referred to in clauses (d),(e),(f) and (g) of sub-rule (2) of the said rule.
    2. Where it appears that the application is not complete in all material particulars or is not accompanied by the required documents, the State Government shall, by notice, require the applicant to supply the omission, or as the case may be, furnish the documents without delay and in any case not later than thirty days from the date of receipt of the said notice by the applicant.
  2. An application for the grant of a prospecting licence shall not be refused on the ground only that, in the opinion of the State Government, a mining lease should be granted for the area for which the application for a prospecting licence has been made:

    Provided that where applications for the grant of prospecting licence and applications for the grant of mining lease in respect of the same area are received on the same date or on different dates within a period of thirty days, the applications for the grant of mining lease shall, if the area was previously held and worked under a mining lease, be disposed of before the applications for the grant of prospecting licence are considered.

    Provided further that the applications received for grant of prospecting licence shall be liable to be considered only if they have not been already disposed of.

13. Refund of Fee

13 A. Status of grant on death of the applicant for prospecting licence.

  1. Where an applicant for the grant of a prospecting licence dies before the order granting him a prospecting licence is passed, the applicant for the grant of a prospecting licence shall be deemed to have been made by his legal representative.
  2. In the case of an applicant in respect of whom an order granting a prospecting licence is passed but who dies before the deed referred to in sub-rule (1) of rule 15 is executed, the order shall be deemed to have been passed in the name of the legal representative of the deceased.

14. Conditions of a prospecting licence.

  1. (1) Every prospecting licence granted under these rules, shall, in addition to any other conditions that may be specified therein, be subject to the following conditions, namely:
    1. (i) the licensee shall pay such prospecting fee as may be fixed by the State Government, being not less than rupee one and not more than rupees ten per hectare of land covered by the licence for each year or part of a year of the period for which the licence is granted or renewed;
    2. the licensee may win or carry for purposes other than commercial purposes -
      1. any quantity of such minerals within the limits specified under column 3 of Schedule III without any payment;
      2. any quantity of such minerals not exceeding the limit specified under column 4 of Schedule III, on payment of royalty for the time being specified in the Second Schedule to the Act in respect to those minerals:


      3. Provided that if any quantity in excess of the quantities specified in sub-clause (b) is won and carried away, the State Government may recover the cost of the excess quantity of minerals won and carried away.
    3. with the written approval of the State Government, the licensee may carry away quantities of minerals in excess of the limits specified in Schedule III, on payment of royalty for the time being specified in the Second Schedule to the Act, for chemical, metallurgical, ore-dressing and other test purposes;
    4. save in the case of land in respect of which the licensee is granted a mining lease, he shall, within six months next after the determination of the licence or the date of abandonment of the prospecting operations, whichever is earlier, securely, plug all bores and fill up or fence all excavations in the land covered by the licence;
    5. the licensee shall report to the State Government the discovery of any mineral not specified in the licence within a period of sixty days from the date of such discovery. Consequent upon such reporting, such newly discovered mineral shall be deemed to have been included in the prospecting licence;
    6. Omitted.
    7. the licensee shall not except with the previous sanction of the State Government transfer his licence:

      Provided that no prospecting licence shall be transferred to any person who has not filed an affidavit stating that he has filed an up-to-date income tax returns and paid the income-tax assessed i8on him and paid the income tax on the basis of self-assessment as provided in the Income Tax Act, 1961(43 of 1961) and except on payment to the State Government of a fee of five hundred rupees.

      Provided further that the State Government shall not grant its sanction for the transfer of prospecting licence unless the transferee has accepted all the conditions and liabilities which the transferor has in respect of such prospecting licence:

      Provided also that the State Government may, by order in writing after providing the licensee the opportunity of being heard, cancel such prospecting licence at any time if the licensee has, in the opinion of the State Government, committed a breach of this clause or rule 15A.
    8. the licensee shall not pay a wage less than the minimum wage prescribed by the Central or the State Government from time to time under the Minimum Wages Act, 1948 ;
    9. the licensee shall observe the provisions of the Mines Act, 1952 (35 of 1952) and the provisions of the Atomic Energy Act, 1962 (33 of 1962) insofar as the latter relate to atomic minerals included in Part B of the First Schedule to the Act.;
    10. the licensee shall -
      1. take immediate measures for planting in the same area or any other area selected by the Central or State Government not less than twice the number of trees destroyed by reasons of any prospecting operations;
      2. look after them during subsistence of the licence after which these shall be handed over to the State Forest Department or any other authority as may be nominated by the Central or State Government;
      3. restore, to the extent possible, other flora destroyed by prospecting operations.
    11. the licensee shall pay to the occupier of surface of the land such compensation as may become payable under these rules;
    12. the licensee shall comply with the Mineral Conservation and Development Rules framed under section 18.
  2. A prospecting licence may contain such other conditions relating to the following as the State Government may think fit to impose, namely:
    1. compensation for damage to land in respect of which the licence has been granted;
    2. indemnity to Government against the claim of a third party for any damage, injury or disturbance caused to him by the licensee;
    3. restrictions regarding felling of trees on unoccupied and unreserved Government land;
    4. restrictions on prospecting operations in any area prohibited by any competent authority;
    5. operations in a reserved or protected forest;
    6. conditions regarding entry on occupied land;
    7. facilities to be given by the licensee for working other minerals in the licenced area or adjacent areas;
    8. filing of civil suits or petitions relating to disputes arising out of the area under prospecting licence .
  3. The State Government may, either with the previous approval of the Central Government or at the instance of the Central Government, impose such further conditions as may be necessary in the interest of mineral development, including development of atomic minerals.
  4. In the case of breach of any conditions imposed on any holder of prospecting licence by or under this rule, the State Government may, by order in writing, cancel the licence and/or forfeit, in whole or part, the amount deposited by the licensee under rule 20;


  5. Provided that no such order shall be made without giving the licensee a reasonable opportunity of stating his case.

15. Licence to be executed within three months.

  1. Where on any application for a prospecting licence an order has been made for the grant of such licence, a deed granting such licence shall be executed within ninety days of the date of the communication of the order or such further period as the State Government may allow in this behalf, and if no such deed is executed within the said period due to any default on the part of the applicant, the State Government may revoke the order granting the licence and in that event the fee paid shall be forfeited to the State Government.
  2. The deed referred to in sub-rule (1) shall be in Form F, or in a form as near thereto as circumstances of each case may require.
  3. The date of the commencement of the period for which a prospecting licence is granted shall be the date on which the deed is executed under sub-rule (1).

    15A. Where on an application for grant of sanction to transfer the prospecting licence under clause (vii) of sub-rule (1) of rule 14, the State Government has granted sanction for transfer of such license, a transfer deed in Form P, or a form as near thereto as possible shall be executed within three months of the date of the consent, or within such further period as the State Government may allow in this behalf.

16. Report of information obtained by the licensee.

  1. The licensee shall submit to the State Government a six monthly report of the work done by him stating the number of persons engaged and disclosing in full the geological, geophysical or other valuable data collected by him during the period. The report shall be submitted within three months of the close of the period to which it relates.
  2. The licensee shall also submit to the State Government within three months of the expiry of the license, or abandonment of operations or termination of the licence, whichever is earlier, a full report of the work done by him and all information relevant to mineral resources acquired by him in the course of prospecting operations in the area covered by the licence.
  3. While submitting reports under sub-rules (1) or (2), the licensee may specify that the whole or any part of the report or data submitted by him shall be kept confidential; and the State Government shall thereupon, keep the specified portions as confidential for a period of two years from the expiry of the licence, or abandonment of operations or termination of the licence, whichever is earlier.

17. Omitted

18. Maintenance of accounts. Every licensee shall maintain an accurate and faithful account of all expenses incurred by him on prospecting operations and also the quantity and other particulars of all minerals obtained during such operations and their despatch.

19. Inspection.

  1. The licensee shall allow every officer authorised by the Central Government or the State Government in this behalf to examine at any time accounts maintained under rule 18 and furnish the Central Government or the State Government such information and returns as it or any officer authorised by it in that behalf may require.
  2. The licensee shall allow any officer authorised by the Central Government or the State Government in this behalf to inspect any prospecting operations carried on by him.

20. Security deposits.

  1. An applicant for a prospecting licence shall, before the deed referred to in sub-rule (1) of rule 15 is executed, deposit as security for the due observance of the terms and conditions of the licence a sum of two thousand and five hundred rupees in respect of the every square kilometer or part thereof for which the licence is granted.
  2. Any deposit made under sub-rule (1), if not forfeited under these rules, shall be refunded to the applicant as soon as the report referred to in rule 16 is submitted.

21. Registers

  1. A register of applications for prospecting licences shall be maintained by the State Government in Form G.
  2. A register of prospecting licences shall be maintained by the State Government in Form H.