Mining lease is a legal contract for the right to work a mine and extract the mineral or other valuable deposits from it under prescribed conditions of time, price, rental, or royalties. A mining lease gives the holder the exclusive right to conduct mining operations and sell the minerals specified in the conditions attached to the lease. Mining operations must be conducted in accordance with an approved program for environment protection and rehabilitation (PEPR).
Sample Format of Mining Lease Deed for Quarrying of Stones is given below.
LEASE AGREEMENT FOR MINING OF STONES
THIS DEED OF LEASE is made at ________________ this ________________ day of _________
Mr. ________________ S/o ________________resident of ________________ hereinafter called 'the Lessor' of the One Part
M/s. ________________ Co. Ltd., a Company registered under the Companies Act,
1956, and having its registered office at ________________ hereinafter called
the 'Lessee' through its authorized Signatory Mr. ________________ of the Other
1. The Lessor is the owner of a hilly track of land situate at ________________ and which is more particularly described in the Schedule hereunder written.
2. The said land and the surface underneath thereof are full of hard stones fit for building purposes.
3. The Lessee has requested the Lessor to grant him a lease of the said land for a period of ____ years, to enable him to exploit the stone material therefrom and to carry on business therein by sale or otherwise and which the Lessor has agreed to do on the following terms and conditions agreed upon between the parties.
NOW THIS DEED WITNESSETH that pursuant to the said agreement and in consideration of the rent and royalty agreed to be paid by the Lessee as hereinafter provided and subject to the covenants terms, and conditions hereinafter mentioned, the Lessor doth demise unto Lessee the said piece of land more particularly described in the Schedule hereunder written for a term of ____ years from the date hereof.
I. And the Lessee hereby covenants with the Lessor as follows:
(a) To pay the rent and royalty in the manner hereinafter mentioned regularly during the subsistence of the Lease.
(b) To pay all taxes, assessments, dues and duties payable to the Govt. or any local authority in respect of the said land and the quarrying operations therein.
(c) To observe and perform the agreements, terms and conditions hereinafter mentioned.
II. AND IT IS HEREBY agreed and declared by and between the parties hereto as follows :
(1) The Lessor doth hereby grant permission to the Lessee to enter upon the said land to carry on quarry operations subject to what is hereinafter provided.
(2) The Lessee has agreed to pay and shall pay to the Lessor a fixed rent of Rs. ________________ per month, to be paid on the ____ day of each month in advance throughout the said term or until earlier termination thereof as hereinafter provided.
(3) In addition to the said rent the Lessee shall pay by way of royalty a sum of Rs. ________________ for every metric ton of stones acquired or produced from such quarrying operations, to be paid at the end of each quarter in respect of the stones acquired during that quarter and the royalty amount shall be paid within ___ days from the end of each quarter. The quarter shall be counted from the day the quarrying operations shall commence.
(4) The Lessee shall maintain an account of the quantity of stones quarried and removed from the land from time to time and shall submit to the Lessor a statement of such account at the end of each quarter. The Lessor shall be entitled to examine the accounts and to supervise the weighing of stones done as and when he thinks fit.
(5) The Lessee shall not start quarrying operations without first obtaining the permission and licences to be obtained from the Government concerned and shall produce such permissions and licences for the inspection of the Lessor when required.
(6) The Lessee will be entitled to bring in all equipment, tools, articles and things which are required to carry on quarrying operations.
(7) The Lessee will be allowed to put up any temporary sheds for keeping and fixing the equipment, articles and things as may be required and at convenient places on the said land but the Lessee shall not construct any buildings or structures of a permanent nature.
(8) The Lessee shall take prior permission for use of explosives and shall use them according to the rules and regulations under the Explosives Act and directions issued by the Inspectors and experts from time to time.
(9) The Lessee shall be entitled to excavate and dig any part or parts of the said land for searching and obtaining stones but the excavation shall not at such places go beyond ______ feet in depth.
(10) It will be the responsibility of the Lessee to obtain an access road from the demised land to the public road for transport vehicles and the Lessor will not be bound to do so.
(11) The Lessee shall not encroach upon or use any part of the land adjoining the demised land, whether it belongs to the Lessor or any other person.
(12) The Lessee shall not cut any tree standing on the demised land without prior permission of the Govt. as now required by law and shall be entitled to cut only such trees, with such permission as aforesaid, which would be occupying the portion of the demised land on which quarrying operations are intended to be carried out. All trees so cut shall be the property of the Lessor and the Lessee will not be entitled to dispose of the same.
(13) The Lessee shall be entitled to excavate and remove only stones from the
said land but shall not remove any other material of substance found while
excavating or digging the said land, including, earth, or other minerals.
(14) The Lessor shall have a lien on the stones excavated for the amount of royalty and rent due and payable to him at any time and the Lessor will be entitled to prevent the Lessee from removing any quantity of stones until such arrears of rent and royalty are paid.
(15) The Lessee shall not assign this lease or any right given hereunder to any other person without the Lessor's prior permission but the Lessee will be entitled to engage contractors for carrying or transporting the stones from the said land.
(16) Whatever royalty and other charges are payable to the Govt. or any other authority for carrying on quarry operations and removing stones will be paid by the Lessee.
(17) The Lessee shall indemnify and keep indemnified the Lessor against all losses costs, charges and expenses that the Lessor may suffer or incur on account of (i) the Lessee committing breach of any law, rule or regulation or directions in connection with the quarrying operations (ii) the Lessee causing any damage to property or loss of life in the operation or use of explosives used in the quarrying operations (iii) the Lessee causing loss to any adjoining land and anything appurtenant thereto by quarrying operations (iv) any accident occurring during quarrying operations and transport of stones (v) non payment of taxes dues and duties payable to the Government or any Local authority in respect of the said land or any other amount payable in respect of the quarrying operations. (vi) any other reason whatsoever.
(18) On the termination of this Lease by efflux of time or otherwise, the Lessee shall remove forthwith all the equipment, articles and things, sheds and quarried stones from the demised land and if they or any of them are not removed within ________________ month from the date of termination, the same shall stand forfeited to the Lessor and will become the property of the Lessor.
III. AND THE LESSOR DOTH HEREBY COVENANT WITH THE LESSEE THAT -
(a) The Lessor has in himself good right and full authority to demise unto the Lessee the demised land and in the manner herein appearing.
(b) That on the Lessee paying the said rent and royalty in the manner aforesaid and observing and performing the covenants conditions and stipulations herein contained and on the part of the Lessee to be observed and performed shall peaceably and quietly hold, possess and enjoy the demised land during the term hereby created without eviction interruption, disturbance, claim and demand whatsoever by the Lessor any person or persons lawfully or equitably claiming by, from, under or in trust for him.
IV. AND IT IS HEREBY FURTHER AGREED AND DECLARED AS FOLLOWS
(a) This Lease is granted on express terms or conditions that if the said monthly rent or any part thereof or the royalty or any part thereof payable in the manner hereinbefore mentioned shall be in arrears for the space of more than _______months after the same shall have become due and payable and whether the same is demanded or not, or if any of the covenants, agreements, terms and conditions hereinbefore provided is not observed or performed by the Lessee or if the Lessee is ordered to be wound up or otherwise goes upto liquidation, or if the Lessee does not start the quarrying operation for more than _____ months from the date hereof, or if the quarrying operations remain closed for more than _______ months continuously for any reason whatsoever, or if the said land or any substantial part thereof is intended to be acquired by the Govt. then and in any of these events it shall be lawful for the Lessor, by giving to the Lessee one month's prior notice to terminate this lease and to enter upon the said land or any part thereof in the name of the whole.
(b) If the said demised land or any major part thereof is acquired by the Government or any local authority or if the Government prohibits the quarrying operations or takes over the same under any law, this lease shall stand terminated, without any notice by the Lessor, on the happening of any of the said events.
(c) If the Lessee does not desire to continue the lease for any reason he will be entitled to terminate this lease by three months' prior notice to the Lessor to that effect but in that event the Lessee will be liable to pay to the Lessor an amount equal to all the rent for the remaining period of the lease and a sum of Rs. ______ as compensation or liquidated damages for loss of the royalty income to the Lessor.
IN WITNESS WHEREOF the parties have put their hands the day and the year first hereinabove written.
THE SCHEDULE ABOVE