(1)

A financial assurance shall be furnished by the holder of the mining lease, for due and proper implementation of the progressive mine closure plan contained in the mining plan or the final mine closure plan, as the case may be, which shall be an amount of three lakh rupees for Category 'A' mines and two lakh rupees for Category 'B' mines, per hectare of the mining lease area put to use for mining and allied activities: Provided that the minimum amount of financial assurance to be furnished under sub-rule (1), shall be ten lakh rupees for Category 'A' mines and five lakh rupees for Category 'B' mines:

Provided further that the provisions of sub-rule (1) shall not be applicable for a mining lease granted through the auction or the mining lease granted under the provisions of clause (b) or clause (c) of sub-section (2) of section 10A, wherein the Mine Development and Production Agreement has been signed between the lessee and the State Government.

(2)

Where financial assurance is required to be furnished by the holder of the mining lease under sub-rule (1), such amount of financial assurance shall be submitted to the authorised officer, as the case may be, in the form of a bank guarantee in the format specified by the Indian Bureau of Mines:

Provided that where financial assurance has already been furnished before the commencement of these rules, an amount equal to the difference between the financial assurance due as on the date of notification of these rules and the financial assurance already furnished, shall be furnished to the authorised officer, as the case may be, within a period of ninety days from the date of notification of these rules:

Provided further that the holder of a mining lease shall be required to enhance the amount of financial assurance with the increase in the area of mining and allied activities:

Provided also that where a leaseholder undertakes reclamation and rehabilitation measures as part of the progressive closure of mine, the amount so spent shall be reckoned as sum of the financial assurance already spent by the leaseholder and the total amount of financial assurance, to be furnished by the lessee, shall be reduced to that extent.

(3)

Release of financial assurance shall be effective upon the notice given by the lessee for the satisfactory compliance of the provisions contained in the final mine closure plan and certified by the authorised officer, as the case may be.

(4)

If the authorised officer, as the case may be, has reasonable grounds for believing that the protective, reclamation and rehabilitation measures as envisaged in the progressive mine closure plan contained in the approved mining plan or the final mine closure plan, in respect of which financial assurance was furnished, has not been or will not be carried out in accordance with the mining plan or the final mine closure plan, either fully or partially, the authorised officer, as the case may be, shall give the lessee a written notice of his intention to issue the orders for forfeiting the sum assured at least thirty days prior to the date of the order to be issued.

(5)

Within thirty days of the receipt of notice referred to in sub-rule (4), if no satisfactory reply has been received in writing from the lessee, the authorised officer, as the case may be, shall pass an order for forfeiting the surety amount and a copy of such order shall be endorsed to the concerned State Government.

(6)

Upon the issuance of order by the authorised officer, as the case may be, the concerned State Government may realise the bank guarantee provided or obtained as financial assurance for the purpose of performance of protective, reclamation, rehabilitation measures and shall carry out those measures, or appoint an agent to do so.