The Union Cabinet recently approved National Mineral Policy 2019 which aims to ensure sustainable mining sector development in future while addressing the issues of project affected persons especially those residing in tribal areas.
Regulation of minerals in India
- Management of mineral resources is the responsibility of both the central and state governments in terms of entry 54 of the Union List (List I) and entry 23 of the State List (List II) of the Seventh Schedule of the Constitution of India.
- Ministry of Mines is responsible for survey and exploration of all minerals for mining and metallurgy of non-ferrous metals like aluminium, copper, zinc, lead, gold, nickel etc. other than natural gas, petroleum and atomic minerals. Mines and Mineral (Development and Regulation) Act, 1957 is the main statute for the regulation of mines and mineral sector in the country.
- The core functions of state in mining will be facilitation and regulation of exploration and mining activities, making provision for development of infrastructure and tax collection.
Issues with Mineral exploration in India
- Low level of exploration: In India, 5.71 lakh square km has been identified as Obvious Geological Potential (OGP) area, out of which only around 10 per cent has been explored. Mining is undertaken in around 1.5-2 per cent of India’s OGP area.
- Low Investment on Exploration: NITI Aayog in its report observe that exploration expenditure per square km in India is $9, when compared to Australia at $5,580 and Canada at $5,310. Further, with respect to the global share on exploration expenditure, Canada tops the list with 14 per cent, Australia at 13 per cent, China and Latin American countries at 6 per cent, African countries at 5 per cent, Russia and Europe at 5 per cent, whereas in India it is as low as 0.2 per cent.
- Growth of mining sector: Indian mining sector has witnessed negative growth in past few years. The contribution of mining to India’s GDP has fallen from 3.4% in 1992-93 to less than 1% (non-fuel, non-atomic) in 2016.
- Illegal Mining: It occurred in states such as Odisha, Karnataka, Goa, Rajasthan and Jharkhand. Illegal mining consists of breach of the terms of a lease i.e. in excess of volume limits, outside lease areas and in the absence of necessary environmental clearances
- Absence of private sector to take up exploration: There is large scale ambiguity in regulation which refrain big companies to take up exploration activities
- Impact on life of tribal communities: Large scale displacement of tribal people due to lack of robust welfare mechanism
- Environmental Concern: Large-scale environmental damage has occurred due to illegal mining
Supreme Court while delivering its judgement on “rapacious” mining in Odisha’s top mining districts (Keonjhar and Sundargarh) observed that the 2008 Policy was too dated to deal with the current challenges of mining which affects the life of local communities especially tribal. The Court therefore, asked the Indian government to revisit the NMP of 2008, and “announce a fresh, more effective, meaningful and implementable policy”.
In compliance of the directions of the apex Court, the Ministry of Mines constituted a committee under the chairmanship of Dr. K Rajeswara Rao. Based on the committee’s report and subsequent deliberations with stakeholders, the ministry of Mines has finalized the National Mining policy 2019 which would replace NMP 2008.
Key features of National Mineral Policy 2019
The aim of National Mineral Policy 2019 is to have a more effective, meaningful and implementable policy that brings in further transparency, better regulation and enforcement, balanced social and economic growth as well as sustainable mining practices.
- Focus on exploration
- Special attention will be given towards exploration of energy critical minerals, fertilizer minerals, precious metals and stones, strategic minerals and other deep-seated minerals which are otherwise difficult to access and for which the country is mainly dependent on imports.
- Clearances shall be streamlined with simpler, transparent, accountable and time bound procedures to facilitate exploration in order to conform to the statutory requirements especially for geologically complex deposits.
- The Policy also mentions rationalize reserved areas given to PSUs which have not been used and to put these areas to auction, which will give more opportunity to private sector for participation
- Encouraged Private sector to take up exploration activities:
- Policy introduce ‘Right of First Refusal’ for RP (reconnaissance permits) and PL (prospective licensing) holders to encourage the private sector to take up exploration.
- The policy also aims at “encouragement of merger and acquisition of mining entities and transfer of mining leases and creation of dedicated mineral corridors to boost private sector mining areas
- The Policy also mentions to make efforts to harmonize taxes, levies & royalty with world benchmarks to help private sector
- States may be mandated to create dedicated funding for boosting exploration activities without additional burden on miners.
- Increase production: It proposes to increase the production of major minerals by 200 per cent in seven years, and reduce trade deficit in mineral sector by 50 per cent in seven years.
- Data Base of Mineral Resources and Tenements
- Baseline and mineral exploration data generated by various central & state government agencies as well as mineral concession holders will be collated and maintained for open dissemination as a public good.
- Collaboration between national and international scientific and research bodies, universities, professional bodies and industry will be encouraged for scientific and technological research to address the mineral exploration challenges in the country.
- Recovery of metal through recycling:
- Efforts shall be made to augment supply by developing processes for recovery of metal through recycling. The reusable nature of metals contributes to conservation of natural resources and includes other benefits in terms of energy conservation, environmental and economic benefits.
- Gender sensitivity: Special focus on improving gender balance in mining industry
- Dedicated mineral corridors: The new policy focusses on use coastal waterways and inland shipping for evacuation and transportation of minerals and encourages dedicated mineral corridors to facilitate the transportation of minerals.
- Long-term export-import policy: It proposes a long-term export-import policy for the mineral sector to provide stability and as an incentive for investing in large scale commercial mining activity.
- Scientific Methods of Mining: Use of equipment and machinery which will improve the efficiency, productivity and economics of mining operations as well as mineral beneficiation process. Promotion of zero-waste mining as the ultimate goal and a commitment to prevent sub-optimal and unscientific mining.
- Beach Sand Minerals: Efforts will be made to encourage extraction of the replenishable deposits of beach sand minerals
- Protection of Environment: All mining shall be undertaken within the parameters of a comprehensive Sustainable Development Framework which will ensure that environmental, economic and social considerations are integrated effectively in all decisions on mines and minerals issues.
- Inter-Generational Equity: The 2019 Policy also introduces the concept of Inter-Generational Equity that deals with the well-being not only of the present generation but also of the generations to come and also proposes to constitute an inter-ministerial body to institutionalize the mechanism for ensuring sustainable development in mining.
- Welfare of Project Affected Persons
- Relief & Rehabilitation of Displaced and Affected Persons
- Devolution of Mining Benefits to Project Affected Persons through District Mineral Foundation (DMF)
- Welfare of Tribal Communities
- Safety of mines and mine-workers
Issues with NMP
- The new mineral policy is primarily guided by ‘ease of doing businesses’ and attracting investments. It alleged that NMP 2019 takes less efforts to make the clearance process robust and comprehensive in order to improve the quality of assessment before projects are cleared.
- Post-clearance monitoring is also weakened.
- NMP 2019 also failed to give guidance for specifying standards and outlining mechanisms for pollution monitoring in mining areas.
- The Policy also falls short in providing necessary guidance to ensure effective mine closure practices.
Various analyst pointed that Dr. K Rajeswara Rao committee consists of government officials without any environmentalist.
National Mineral policies 2019 tried to ensure more effective regulation for development of mining sector development in future. The government should set up an independent ‘Minerals Audit Agency’ to monitor all aspects of mining operations i.e. financial, social and environmental.