Sterlite Industries (India) Limited - Sterlite Industries India Ltd.

mineral development on the forest, environment and ecology through appropriate protective measures. The aim of the National Mineral Policy
is to achieve zero waste mining and the extraction and utilization of the entire run of mines within a framework of sustainable development
through the establishment of a resource inventory and registry to be maintained by the IBM, manpower development through education and
training, infrastructure development in mineral bearing areas and the facilitation of financial support for mining. At the same time, the
Government of India also made various amendments to India’s mining laws and regulations to reflect the principles underlying the National
Mineral Policy.
Grant of a Mining Lease
Only the government of the applicable state may grant a mining lease. The mining lease agreement governs the terms on which the lessee
may use the land for the purpose of mining operations. If the land on which the mines are located belongs to private parties, the lessee must
acquire the surface rights relating to the land from such private parties. If a private party refuses to grant the required surface rights to the
lessee, the lessee is entitled to inform the state government and deposit with the state government compensation for the acquisition of the
surface rights. If the state government deems that such amount is fair and reasonable, the state government has the power to order a private
party to permit the lessee to enter the land and carry out such operations as may be necessary for the purpose of mining. For determining what
constitutes a fair amount of compensation payable to the private party, state governments are guided by the principles of the Land Acquisition
Act, 1894, as amended, or Land Acquisition Act, which generally governs the acquisition of land by governments from private individuals. In
case of land owned by the government, the surface right to operate in the lease area is granted by the government upon application as per the
norms of that state government.
If the mining operations in respect of any mining lease results in the displacement of any persons, the consent of such affected persons, and
their resettlement and rehabilitation as well as payment of benefits in accordance with the guidelines of the applicable state government,
including payment for the acquired land owned by those displaced persons, needs to be settled or obtained before the commencement of the
mining project. In respect of minerals listed in the First Schedule of the MMDR Act, prior approval of the Government of India is required to
be obtained by the state government for entering into the mining lease. The approval of the Government of India is granted on the basis of the
recommendations of the state governments, although the Government of India has the discretion to overlook the recommendation of the state
governments. On receiving the clearance of the Government of India, the state government grants the final mining lease and prospecting
license. The lease can be executed only after obtaining the mine plan approval from the IBM, which is valid for a period of five years. A
mining lease for a mineral or prescribed group of associated minerals cannot exceed a total area of 10 square kilometers. Further, in a state
(province), one person cannot acquire mining leases covering a total area of more than 10 square kilometers. However, the Government of
India may, if necessary in the interest of development of any mineral, relax this requirement.
The maximum term of a mining lease is 30 years and the minimum term is 20 years. A mining lease may be renewed for further periods of
20 years or less at the option of the lessee. Renewals are subject to the lessee not being in default of any applicable laws, including
environmental laws. The MC Rules provide that if a lessee uses the minerals for its own industry, then such lessee is generally entitled to a
renewal of its mining lease for a period of 20 years, unless it applies for a lesser period. The lessee is required to apply to the relevant state
government for the renewal of the mining lease at least one year prior to the expiry of the mining lease. Any delay in applying for a renewal of
the mining lease may be waived by the applicable state government provided that the application for renewal is made prior to expiry of the
mining lease. In the event that the state government does not make any orders relating to an application for renewal prior to the expiration of
the mining lease, the mining lease is deemed to be extended until such time the state government makes the order on the application for
renewal.
Protection of the Environment
The MMDR Act also deals with the measures required to be taken by the lessee for the protection and conservation of the environment from
the adverse effects of mining. The MCD Rules require every lessee to take all possible precautions for the protection of the environment and
control of pollution while conducting mining operations in any area. The required environmental protection measures include, among others,
prevention of water pollution, measures in respect of surface water, total suspended solids, ground water pH, chemicals and suspended
particulate matter in respect of air pollution, noise levels, slope stability and impact on flora and fauna and the local habitation.
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