India’s mining reforms juggernaut continues despite concerns

Continuing with its ‘mining reforms’, the Union Ministry of Mines, earlier this month, unveiled a new set of amendments to give a push to mining activities in the country, ensure a continuous supply of minerals, ease of business for industry and push the process of the auction for the mining sector.

–In its latest attempt to give a push to the mining sector to revive the Indian economy, the government of India has proposed several amendments to the country’s mining regulations.

–The changes propose to allow captive miners to commercially sell 50 percent of their coal, allows the central government to auction mines controlled by states and eases rules for industry in terms of green clearances.

–But those working with mining-affected communities argue that these ‘mining reforms’ are being imposed on people to help the industry even as concerns of people and impact on the environment is being ignored.

Notwithstanding concerns regarding pollution from a mine, its impact on the environment including water bodies or concerns of mining-affected communities, the government of India in the latest push for mining reforms is proposing amendments stating that all valid approvals, clearances, and licences, once granted to a mine, shall continue to be valid till exhaustion of mineable reserves in the mine to save the industry from the “time consuming” process of obtaining fresh clearances.

Continuing with its ‘mining reforms’, the union ministry of mines, earlier this month, unveiled a new set of amendments to give a push to mining activities in the country, ensure a continuous supply of minerals, ease of business for industry and push the process of the auction for the mining sector.

The ministry said the amendments in the Mines and Minerals (Development and Regulation) Act 1957 are being proposed after consultation with the “central (government) ministries, state government and general public.”

It has invited comments and suggestions from the public, state governments, the mining industry, industry associations, and others by February 24, 2021.

Mining reforms have been on the top of the central government’s agenda over the past few years. The process gained momentum when the government announced a series of measures to revive the economy after the impact of Covid-19. The government had proposed a set of changes in the mining rules and regulations which were severely criticised by environmentalists and those working with mining-affected communities. But an undeterred government has repeatedly emphasised that the mining sector is going to be critical in India’s growth over the next few years.

Now the latest amendment proposal states that the MMDR Act was amended through the Mineral Laws Amendment Act 2020 to provide for vesting of valid rights, approvals and clearances, in relation to leases expiring, for the period of two years.

But, the proposal said, the new owners who secured the mines in the auctions are facing difficulties in “obtaining fresh clearances within two years period as they have to undergo the lengthy process afresh which is time-consuming although all the step have already been complied with by the previous” leaseholders while obtaining the green clearances initially.

The amendment note emphasised that it is required to change the mining law so that “all the valid rights, approvals, clearances, licences and the like granted shall continue to be valid till exhaustion of mineable reserves in the mine.”

This signifies that the clearances, once given, shall be “transferred and vested to” any new company successfully getting the mine in the auction. It would also be applicable for all minerals.

The idea behind the changes is to ensure ease of business for the industry and simplify processes. But according to experts, these mining reforms may end up against the interests of the mining-affected communities.

Alok Shukla of the Chhattisgarh Bachao Andolan, an organisation working on mining-related issues including its impact on the environment and communities, said it is dangerous to give a blanket clearance to the mining industry while ignoring the ill impact of mining on communities and the environment.

“This is injustice with the communities living close to mining areas. What if the conditions of a mining area change after mining operations for a few years? All such concerns need to be taken into account,” Shukla told Mongabay-India.

Over the past few years, the transition that intensive mining activities bring in the lives of the communities living in and around the mining areas has become a topic of discussion. There are numerous instances of mining activities leading to a severe increase in air and water pollution.

“When we have such cases, how can a blanket exemption be given to the mining industry on the pretext of ease of business,” Shukla questioned.

Are proposed mining amendments against states?

The amendments also talk about the central government auctioning mines in case the states are facing difficulties.

The proposed changes emphasise that under the MMDR Act, the “states conduct auction of mineral concessions” and “since 2015, the central government exploration agencies have handed over geological reports for 143 mineral blocks to various state governments which are ready for auction” but of those, “only seven blocks have been auctioned by the states.”

The note for amendment highlighted that, in addition, the mining lease in relation to 334 blocks expired on March 31, 2020, of which 46 were working mines.

“Ministry of mines is pursuing with the state government since early 2019 for an early auction of these block ensuring continuity in the production of minerals. However, only 28 blocks have been auctioned till date,” said the note.

The government notes in the draft proposal that “to ensure continuous supply of minerals in the country more number of mineral blocks are required to be brought under auction on regular basis” as “any delay in conduct of auction has substantial impact on the availability as well as prices of minerals.”

The central government, justifying the move of taking over the auction of minerals from the state governments, proposed to provide itself with the power to conduct the auction in cases where the state government faces challenges or fails to conduct the auction.

“In cases where the central government auctions the blocks, the revenue in respect of such blocks will accrue to the state government only,” said the note detailing the proposed amendments.

Environmental lawyer Rahul Choudhary said auctioning of mines without taking into confidence and consent of states is taking over the ownership of the state government over the mines. “State governments have a larger role in auctioning of the mines. The central government can’t impose its will on the states,” Choudhary told Mongabay-India.

Bonanza for captive miners in the proposed mining reforms

In the proposed changes, the ministry of mines is also proposing to allow captive mines holders to sell up to 50 percent of the minerals excavated during the current year, after meeting the requirement of the attached plant.

“An additional amount as prescribed by the central government will be charged on such sale,” the note emphasised.

Allowing the sale of half of the coal produced by captive coal mines, will “help in increase in production of coal from captive mines, increase coal availability in the market-leading to reduction in import of coal. This will also ensure additional revenue to the states,” noted the proposal.

“Coal being an important input for various core sector industries, increasing availability of coal would lead to Atmanirbhar Bharat (self-reliant India). Reducing the import bill will also help to curb the trade deficit of India,” said the proposed amendments.

The proposal said that the government would charge an “additional amount on extension of mining leases of both coal and non-coal government companies.”

In 2020, as part of its overall mining reforms push, the central government made a major case for the commercialisation of coal mining to end the import of coal in India. But the move has under the scanner of experts and environmentalists who state that we already have overcapacity, it is against India’s clean energy transition plan and, in fact, would have an adverse impact on the environment and communities impacted by coal mining.

Both Rahul Choudhary and Alok Shukla criticised the government’s proposal to allow the captive miners to commercially sell coal. “This defeats the whole purpose of the auction and instead, this would mean that the entire coal sector one way or another is going to be open to commercial coal mining. This should not be allowed,” Shukla said.

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