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Govt mulls life ban on illegal miners

The government plans to blacklist errant miners, signalling hardening of stance against rampant illegal mining. The mines ministry has initiated steps to frame new rules and regulations that will empower the Centre to bar those found mining illegally from securing any government contract, a senior official told media.

The proposal for a life ban on defaulting miners was moved by the Shah Commission, investigating illegal mining across Karnataka, Goa and Odisha. “We have accepted the commission’s recommendation and taken immediate steps in that direction,” G Srinivas, joint secretary in the mines ministry said. This will be the harshest measure against defaulting mining firms who were until recently required to just pay a fine to continue mining. Companies belonging to some of India’s largest business groups have been involved in mining operations in the three states.

The government has already accepted Shah Commission’s other recommendation of restricting ore exports. A 30% duty has been imposed on iron exports with effect from January 1 to make illegal mining less attractive and to improve availability of the ore for local steelmakers.

According to a note prepared by the ministry, the government has begun the process of amending Rule 27 of the Mineral Concession Rules, 1960. The section lists conditions under which the government could refuse to grant or renew a mining lease.

“The amended Rule 27 would be notified after following due process of vetting of the draft amendment by the ministry of law and justice,” the ministry note said.

The Mines and Minerals (Development and Regulation) Bill, 2011, also proposes strict action, such as imprisonment and fines up to `15 lakh, against illegal miners.

In July 2011, the Karnataka Lokayukta had named subsidiaries of Adani Enterprises, JSW Steel, Sesa Goa and state-owned National Mineral Development Corporation for flouting mining norms. Later the Supreme Court, acting on an interim report of the Central Empowered Committee, suspended all mining leases in Karnataka and imposed a temporary ban on extraction of ore.

The CEC, which has just concluded the hearing of all mine lessees, will present its final report to the Supreme Court next week. Its investigations have absolved only 26 of the state’s 124 mines.

Analysts say the ban on mining has impacted steel companies who source iron ore from Karnataka. “Although, the companies have been able to buy minerals from the e-auction in Karnataka, fast depleting stocks will put the pressure on NMDC,” said Ashish Upadhyay of Fitch Ratings, which recently released an outlook for Indian steel companies.

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