Executive Summary:
This document is the response to Lok Sabha Starred Question No. 48 concerning the potential merger of IREL, HCL, and NALCO, findings of the Shah Commission regarding illegal mining, and systemic reforms to prevent fraud. The Minister of Coal and Mines provided a statement on 23.07.2025, addressing these points. The statement clarifies the government's position and actions taken.
Key Points / Main Content:
Merger Proposal:
* There is no proposal under consideration by the Ministry of Mines to merge Indian Rare Earth Limited (IREL), Hindustan Copper Limited (HCL), and National Aluminium Company Limited (NALCO) into a National Critical Minerals Corporation.
Shah Commission Findings:
* The Central Government appointed the Shah Commission to investigate illegal mining of iron ore and manganese ore.
* The Commission's report was submitted to the Ministry of Mines and subsequently laid in Parliament.
* The report and Memorandum of Action Taken are available on the Ministry of Mines website.
Systemic Reforms and Prevention of Illegal Activities:
* State Governments are primarily responsible for controlling illegal mining, transportation, and storage of minerals, as empowered by Section 23C of the Mines and Minerals Development and Regulation (MMDR) Act, 1957.
* The Central Government supports these efforts through policy initiatives.
* The MMDR Act, 1957 was amended in 2015 to include stringent punitive provisions for illegal mining, transportation, and storage (Sections 30B, 30C, 21, and 23C).
* 21 State Governments have framed rules under section 23C of MMDR Act,1957 to curb illegal mining, transportation and storage of minerals.
* 22 State Governments have set up Task Forces to control illegal mining and review actions taken.
* The Ministry of Mines launched the Mining Surveillance System (MSS) in October 2016 to detect likely incidences of illegal mining using space technology and sends triggers to State Governments for verification.
* Guidelines were issued on 03.10.2023 to mineral-rich States for preventing misclassification of grades of iron ore and other minerals using technology, including blockchain for tracking minerals.
Impact Analysis:
State Governments:
* Impact: Retain primary responsibility for preventing and controlling illegal mining, transportation, and storage of minerals within their respective jurisdictions.
* Action Required: Enforce existing rules under Section 23C of the MMDR Act, 1957, implement the guidelines issued by the Ministry of Mines regarding the prevention of misclassification of mineral grades, and act on triggers generated by the Mining Surveillance System (MSS).
Ministry of Mines:
* Impact: Responsible for supporting State Governments through policy initiatives and technological solutions to combat illegal mining.
* Action Required: Continue to provide policy support, maintain and improve the Mining Surveillance System (MSS), and monitor the implementation of guidelines related to mineral grade classification by State Governments.
Mining Companies/Industry:
* Impact: Subject to stricter regulations and potential penalties for illegal mining, transportation, and storage.
* Action Required: Comply with all applicable laws and regulations, including accurate self-declaration of grades, cooperate with mineral tracking systems (e.g., blockchain), and ensure proper transportation permits.
Key Entities Referenced
Indian Rare Earth Limited (IREL): A public sector undertaking involved in mining and processing of rare earth minerals. The document discusses a potential merger of IREL with other entities.
Hindustan Copper Limited (HCL): A public sector undertaking involved in copper mining and processing. The document discusses a potential merger of HCL with other entities.
National Aluminium Company Limited (NALCO): A public sector undertaking involved in aluminium production. The document discusses a potential merger of NALCO with other entities.
China Minmetals: A Chinese state-owned metals and mining company, used as a comparison point for the potential National Critical Minerals Corporation.
Shah Commission: A Commission of Inquiry, headed by Justice M. B. Shah, appointed to investigate illegal mining of iron ore and manganese ore.
Mines and Minerals Development and Regulation Act, 1957: A central act governing the regulation of mines and minerals development in India. Several sections of this act are referenced in the document.
Mining Surveillance System (MSS): A system launched by the Ministry of Mines to detect likely incidences of illegal mining using space technology.
Andhra Pradesh: One of the State Governments in India that has framed rules under section 23C of MMDR Act,1957 to curb illegal mining, transportation and storage of minerals.
GOVERNMENT OF INDIA
MINISTRY OF MINES
LOK SABHA
STARRED QUESTION No. *48
ANSWERED ON 23.07.2025
MERGER OF IREL, HCL AND NALCO
*48. DR. PRADEEP KUMAR PANIGRAHY:
Will the Minister of MINES be pleased to state:
(a) whether the Government is considering a merger of Indian Rare Earth Limited
(IREL), Hindustan Copper Limited (HCL) and National Aluminium Company Limited
(NALCO) into a ‘National Critical Minerals Corporation’ to compete globally as China’s
dominance comes from state-backed monopolies like China Minmetals, if so, the
details thereof and if not, the reasons therefor;
(b) whether the Shah Commission revealed systemic fraud like fake transportation
permits, under-invoiced exports and bribed officials and if so, the details thereof; and
(c) the details of systemic reforms like blockchain-based mineral tracking, AI-powered
satellite audits the Government is implementing / proposes to implement to prevent
this elsewhere?
ANSWER
THE MINISTER OF COAL AND MINES
(SHRI G. KISHAN REDDY)
(a) to (c) A Statement is laid on the Table of the House.STATEMENT REFERRED IN REPLY TO PARTS (a) TO (c) OF LOK SABHA
STARRED QUESTION NO. *48 FOR ANSWER ON 23.07.2025 ASKED BY DR.
PRADEEP KUMAR PANIGRAHY REGARDING MERGER OF IREL, HCL AND
NALCO
(a) There is no such proposal under consideration of the Ministry.
(b) The Central Government, vide Notification No. S.O. 2817 (E) dated 22.11.2010,
appointed Commission of Inquiry under the Chairmanship of Justice M. B. Shah for
the purpose of making inquiry of illegal mining of iron ore and manganese ore in
contravention of the provisions of the Mines and Minerals (Development and
Regulation) Act, 1957, the Forest (Conservation) Act, 1980, the Environment
(Protection) Act, 1986 or other rules or licences or guidelines issued thereunder
referred to as illegal mining. The Justice M.B. Shah Commission submitted the report
to the Ministry of Mines, which was subsequently laid in the Parliament. The report of
Shah Commission of Inquiry and Memorandum of Action Taken on the reports are
available on the website of the Ministry of Mines in the Policy Menu. Web link:
(https://mines.gov.in/webportal/shahcommissioninquiry)
(c) The Section 23C of the Mines and Minerals (Development and Regulation)
(MMDR) Act, 1957 empowers the State Government to frame rules to prevent illegal
mining, transportation and storage of minerals and for purposes connected therewith.
Therefore, the control of illegal mining, transportation and storage of minerals and
purposes connected therewith is primarily the responsibility of the State Government.
The Central Government supports and augments these efforts through policy
initiatives from time to time. Some of the steps taken by the Central Government for
the prevention and control of the frauds like fake transportation permits, under invoiced
exports etc. are as under:
(i) The MMDR Act, 1957 was amended through the MMDR (Amendment) Act,
2015, wherein Section 30B and 30C read with Section 21 and 23C, inter-alia, provide
stringent punitive provisions for illegal mining, transportation and storage.
(ii) Altogether, 21 State Governments namely, Andhra Pradesh, Bihar,
Chhattisgarh, Goa, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir,
Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Nagaland, Odisha,
Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, Uttarakhand, and West Bengal; have
framed rules under section 23C of MMDR Act,1957 to curb illegal mining,
transportation and storage of minerals.
(iii) Altogether, 22 State Governments namely, Andhra Pradesh, Assam, Bihar,
Chhattisgarh, Goa, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka,
Madhya Pradesh, Maharashtra, Manipur, Mizoram, Nagaland, Odisha, Punjab,Rajasthan, Tamil Nadu, Uttar Pradesh, Uttarakhand and West Bengal; have set up
Task Forces, specially constituted to control illegal mining and review the action taken
by member departments for checking the illegal mining, transportation and storage
activities.
(iv) The Ministry of Mines has launched the Mining Surveillance System (MSS) in
October 2016 through IBM. The MSS system detects likely incidences of illegal mining
using space technology. The triggers generated are sent to State Governments for
verification and further action.
(v) The Ministry of Mines also issued guidelines on 03.10.2023 to major mineral
rich States for prevention of misclassification of grades of iron ore and other minerals
by using technology. The State Governments were requested to implement the said
guidelines by suitably incorporating the same in the rules framed by the State
Governments under Section 23C of the MMDR Act, 1957. The said guidelines
envisage the use of block chain technology for tracking of minerals during complete
value chain including self-declaration of grades, tracking of transport vehicles,
automation of invoice reconciliation etc.
*****