Revenue, but at what cost?
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