Section 9A of MMDR : Section 9A: Dead Rent To Be Paid By The Lessee

Explanation using Example

Imagine a company, XYZ Mining Corp, holds a mining lease for an area rich in bauxite. According to Section 9A of The Mines and Minerals (Development and Regulation) Act, 1957, XYZ Mining Corp is required to pay an annual dead rent to the State Government. The rate of this dead rent is specified in the Third Schedule of the Act.

In a year when the company's mining operations are extensive, and they extract a significant amount of bauxite, they are liable to pay royalty on the mineral they have removed. If the royalty amount exceeds the dead rent for that year, XYZ Mining Corp will pay the higher amount, which is the royalty, as per the law.

However, if in the following year, the company's extraction levels drop due to market conditions, and the royalty due on the lesser amount of bauxite extracted is lower than the dead rent, the company must then pay the dead rent, which is the greater amount in this scenario.

Additionally, if the Central Government decides to amend the Third Schedule to change the rate of dead rent, they will issue a notification, and the revised rates will apply from the specified date. However, the company can be assured that such an enhancement in the rate of dead rent will not occur more than once in a three-year period.