Rev­enue, but at what cost?

Down to Earth - - MINING ORDINANCE -

baux­ite and lime­stone that re­main de­posited close to the sur­face,and where sub­stan­tial ex­plo­ration work has been done by state agen­cies. For deep-seated min­er­als, which re­quire highly spe­cialised hu­man and tech­ni­cal re­sources and is cap­i­tal-in­ten­sive,“firstin-time” prin­ci­ple (who­ever first ap­plies for prospect­ing per­mit) is the most cer­tain way of grant­ing min­eral con­ces­sions. The prime ob­jec­tive of auc­tion­ing is to get more rev­enue for the state gov­ern­ment. While this is fair enough, fo­cus on rev­enue max­imi­sa­tion can lead to a race to the bot­tom, wreak­ing havoc on the en­vi­ron­ment, ecosys­tem and peo­ple.

Con­sider this.Most min­eral de­posits in the coun­try are lo­cated in eco­log­i­cally sen­si­tive ar­eas. A ma­jor share of baux­ite de­posits are found in the hill­tops of east coast states such as Odisha, while iron ore, man­ganese and la­t­erite are abun­dant in the West­ern Ghats. Auc­tion guide­lines thus need to be de­vel­oped to dis­cour­age min­ing in eco­log­i­cally sen­si­tive ar­eas.

En­vi­ron­men­tal con­cerns in­crease fur­ther when one con­sid­ers the kind of un­sci­en­tific and in­ef­fi­cient min­ing prac­tices the or­di­nance en­cour­ages.

While the mmdr Act grants min­ing leases for max­i­mum 30 years and al­lows it to be re­newed for up to 20 years, the or­di­nance grants leases for 50 years with­out any pro­vi­sion for lease re­newal.This also ap­plies to ex­ist­ing mines.Worse,the or­di­nance puts a spe­cial em­pha­sis on ex­tend­ing the min­ing lease of cap­tive mines. Pro­mo­tion of cap­tive mines would only aid poor en­vi­ron­men­tal per­for­mance of in­dus­tries own­ing the mines. Analy­ses by Delhi-based non-profit Cen­tre for Science and En­vi­ron­ment (cse) for the ce­ment sec­tor in 2005 and steel sec­tor in 2012 show that en­vi­ron­men­tal per­for­mance of th­ese sec­tors largely de­pends on the way they source raw ma­te­rial from their cap­tive mines. While ce­ment com­pa­nies were re­luc­tant to in­vest in proper man­age­ment of mines,steel com­pa­nies were hardly de­vel­op­ing tech­nolo­gies for ef­fi­cient use of raw ma­te­ri­als. Be­sides, cap­tive mine al­lo­ca­tions in­volve un­scrupu­lous ac­tiv­i­ties. The Supreme Court,in its Au­gust 2014 judge­ment on the coal scam, noted that the way in which coal blocks were al­lo­cated to pri­vate par­ties for cap­tive min­ing was highly “ad hoc”, due to which “com­mon good and public in­ter­est suf­fered heav­ily”. Given the in­ef­fi­ciency and non-trans­parency in al­lo­ca­tion and func­tion­ing of cap­tive mines, the gov­ern­ment should en­sure that new al­lo­ca­tions are made through “open auc­tion” fol­low­ing proper ex­plo­ration of min­er­als.

The or­di­nance has done away with the pro­vi­sion of re­newal of leases.Given that as­sess­ment and mon­i­tor­ing of mines are weak in In­dia, such a pro­vi­sion in the mmdr Act of­fered an op­por­tu­nity to as­sess the per­for­mance of mines,both in terms of pro­duc­tiv­ity and en­vi­ron­men­tal im­pact. A long lease pe­riod with­out any pro­vi­sion for pe­ri­odic au­dit would fur­ther im­pact reg­u­la­tory su­per­vi­sion.So,a mech­a­nism must be put in place to en­sure intermittent as­sess­ment of a mine’s per­for­mance.

The or­di­nance fur­ther states that mines will be re-auc­tioned af­ter the leases ex­pire. This will dis­cour­age lease­hold­ers from in­vest­ing in pro­gres­sive clo­sure and re­ha­bil­i­ta­tion of mines.The long du­ra­tion of the lease will also make it dif­fi­cult to es­ti­mate and es­tab­lish ap­pro­pri­ate fi­nan­cial guar­an­tee to en­sure that mine clo­sure will hap­pen.This will en­cour­age the prac­tice of “dig and run”,adding to the bur­den of aban­doned mines.

As per 2010 es­ti­mates by the In­dian Bureau of Mines, there are 297 aban­doned mines of ma­jor min­er­als. This does not in­clude aban­doned coal mines,which,ac­cord­ing to a 2008 anal­y­sis by cse,num­ber at least 240. How­ever, this could still be a gross un­der­es­ti­ma­tion of the scale of the prob­lem. For­mer Union en­vi­ron­ment min­istry of­fi­cials ac­knowl­edge the poor doc­u­men­ta­tion of aban­doned mines.In De­cem­ber 2014,re­spond­ing to a Lok Sabha ques­tion on the sta­tus of aban­doned mines, the Min­istry of Mines stated that there are 5,028 non-work­ing mines and that there is no “sep­a­rate clas­si­fi­ca­tion”of aban­doned or sick mines.

Writ­ing off so­cial con­tract

It is not just the en­vi­ron­ment, the or­di­nance also brushed aside the con­cerns of miningaf­fected com­mu­ni­ties. Ac­cord­ing to the Union Min­istry of Tribal Af­fairs,90 per cent

The or­di­nance high­lights auc­tion­ing as a key tool to re­form min­ing gov­er­nance. It re­mains si­lent on strength­en­ing reg­u­la­tory in­sti­tu­tions and mech­a­nisms

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