Secret mining!
PSUs as well as private companies are using a proxy model to bypass regulation and evade scrutiny ISHAN KUKRETI
PSUs outsource coal mining operations to evade regulation
IN THE first week of September this year, the Union government belatedly woke up to the fact that private companies were carrying out coal mining on behalf of Public Sector Undertakings (PSUs), but without any regulation. The Prime Minister’s Office then wrote to the government think tank, NITI Aayog, asking it to prepare a legal framework to govern mining by private companies.
But the irony is that private players as well as PSUs are using the Mine Developer and Operator (MDO)
model as a proxy to bypass regulation and evade scrutiny. When a PSU or a private company signs a contract with an MDO, the entire process of mining goes to the MDO,
and there is no law to govern them.
Usually, such contracts are signed only when the PSU does not have any mining experience. However, a response to a query filed under the Right to Information (RTI) accessed by Down To Earth shows that even PSUs that are primarily coal mining companies—like NLC India Limited (formerly Neyveli Lignite Corporation Limited)— have appointed MDOs to undertake mining. Now all operational coal mines of PSUs, allotted to them between 2015 and 2020, are being run by private companies. Mining contracts have also been given by Coal India Limited, but these are short-term ones and deal with specific aspects in the mining process. But, MDO contracts are long-term (30-35 years), and companies outsource all responsibilities—from land acquisition to coal transportation. MDOs are indeed shrouded in secrecy and there is little information about them in the public domain. “There