The sustainable development of the mineral industry, with a view to achieving the desired growth rate lies at the very core of the mines ministry. On National Mineral Policy, Mines Minister Bijoy Krishna Handique said, the same was brought out after deliberations with State Governments and various other stakeholders. Some state governments like Orissa raised concerns on the need to allow the states to give preference to value addition in grant of mineral concessions, levy of royalty on ad valorem basis, preferential treatment to PSUs for granting mineral concessions.
The government also considered issues like security of tenure and policy on seamless transition; both were viewed as the basic premise for attracting investment into the mineral sector. From the very beginning the Ministry consulted all stakeholders and then drafted the new Act. Thereafter there had been one round of interactions with the stakeholders and commonly accepted principles for legislative changes were evolved.
Based on such discussions the draft Mines and Minerals (Development and Regulation) Act has been harmonized and the same has been circulated to all the stakeholders on September 18, 2009.There are some apprehensions on the draft despite some broad agreements among the stakeholders.
The disagreements cover issues like proposal to do away with the prior approval system for ten non-coal and atomic minerals in the first schedule—these are iron ore, chrome, bauxite, manganese, copper, lead, zinc, asbestos, diamond and gold. Concern has been raised on the need to introduce auction for such deposits which have a proper prospecting and feasibility report. There has also been demand to retain the reservation for PSUs. The other concern was on rationalization of the maximum and minimum area of the mineral concessions and defining the powers of the Mining Administrative Tribunals.
The ministry did not favour reservation which goes against the concept of level playing field, creates several inequities and harms the larger interest of mineral development. The new draft act places great emphasis on sustainable mining, with proper protection of the concerns of the local people. In fact my ministry is under the process of preparing a Sustainable Development Framework for the Indian Mining Sector.
The Framework would be mandatory for all the mining activities in the country and would largely consist of voluntary as well as statutory initiatives. I assure you that the recent initiatives seek to be an integrative process.”
On Naxal problems in resource zones minister Handique offers an integrative approach. “As I said earlier, the new Policy and the draft Act seek to have an integrative approach. The Ministry is of the opinion that at present the States need to translate the mineral resource into mineral wealth, which could drive the economic growth of the region. The setting -up of a dedicated Mineral Fund would enhance the capacity development initiatives at the State level, which in turn would help in making mining activities more sustainable. The proposed Sustainable Development Framework would increase the interaction between the local people and the mining companies, apart from the CSR initiatives.”
The states have received Rs 2,000 crore from the revised royalty rates notified on August 13, 2009. Certainly, the minister knows how to give some and take some by striking a balance.
“I would like to share with you that the rates of royalty and dead rent were recommended by a Study Group which consisted of important mineral producing state governments of Chhattisgarh, Jharkhand, Karnataka, Orissa, Rajasthan. The central Government has accepted the recommendations of the Study Group, and notified the revised rates. The states should be satisfied now.”
The need for modernization of mines has not escaped the minister's attention. “The National Mineral Policy proposes to strengthen the National agencies like the Indian Bureau of Mines (IBM), Geological Survey of India (GSI), and the State Directorates of Mining and Geology to encourage modernization of mining activities. The proposed new draft is designed to attract new investors with high end technology to enter the field. We are considering schemes for incentivizing activities for beneficiation and sintering of low grade ore. Recently IBM has recommended revising the threshold values for certain important industrial use minerals like iron ore, for increasing the optimum utilization of the ore.”
Transparency is critical in working towards a consensus. The ministry under Handique has thus remained transparent in all its decision making process. While nobody can say that any private company benefitted unduly nor can one say that the PSUs were favoured. The ministry has been following the provisions of the MMDR Act while granting mining licenses. It has not granted any iron ore lease to MMTC. “The ministry had received a request from MMTC for reservation of area in Karnataka for undertaking mining activities. The Ministry has not received any request directly or indirectly from L N Mittal group in this matter. The ministry had considered the request of MMTC and had decided to close the case.”
On the NGOs acting against the Niyamgiri mines of the Vedanta Group, cleared by the state and central governments and examined and okayed by the nation’s Apex Court the minister feels, “The misgivings of the NGOs are unfortunate.”
There is no reason to call minister Handique as a friend of the Aluminum giant since the same ministry has refused to sell 49 per cent of BALCO stake to Sterlite.
“Government of India had divested 51 per cent of its stake in BALCO alongwith transfer of management control in favour of Sterlite Industries (India) Ltd, the strategic partner in March 2001. As per provisions of Shareholders Agreement (SHA) signed at the time of disinvestment, M/s SIIL exercised call option in March 2004 for acquiring the remaining 49n per cent shares of BALCO.
However, in view of the opinion of the Attorney General, given in March 2006 that the call option and valuation date provision were ultra vires of section 111 A of the Companies Act, the call option was repudiated. According to the section there cannot be any fetters on the rights of a shareholder of a public limited Company to sell its shares freely. Presently the matter is under the consideration of a three member Arbitral Tribunal.”
The ministry is organizing an Investor’s Meet and Conference for Development of Mineral Resource and Mineral Based Industry in North Eastern Region on 6th and 7th of November to explore the mineral prospects in the region. North East is rich in Uranium—the state government of Meghalaya is now consulting the Atomic Energy Commission for exploring the same.
Coal in Meghalaya and Nagaland are said to be of good quality. Both states are examining the ways and means of bringing the mining activity under the state governments. Jiajuri region of Assam is rich in Silica Sand and can have a base for glass industry. Minister Handique is from the region and also holds the charge of the ministry of DONER (Development of North East Region). He has assigned the task to GSI and MECL (Mineral Exploration Corporation Limited).
“GSI will undertake exploration for: Assessment of Iron Ores in East Garo Hills district, Meghalaya, Investigation of Platinum group of elements in Ophiolite belt of Nagaland and Manipur, MECL will carry out detailed exploration for glass sand in Nagaon district of Assam and also Rupa Dolomite prospect in Arunachal Pradesh.”
The Centre is concerned over illegal mining and the damage to the national resource and environment as a result. While mining leases are granted only after proper environmental clearances and IBM inspects such mines regularly there have been instances of illegal mining activities.
“In Bellary in Karnataka, certain instances of illegal mining in forest areas had been noticed by the State Government. The Lokayukta of the state government investigated the same and took punitive actions against the State officials. Further to curb the menace, the central government has asked the states to use satellite data to tackle the menace of illegal mining. Apart from this, the central government is examining the legality of initiating direct action in case of such illegal mining.”
Minister Handique has all the right intentions. But finally the success of using national resources in a sustainable manner and for the growth of the national economy depends on the ability and willingness of the local administration to enforce the rules and processes. This needs bringing in all the stakeholders and participation of the locals as well. The ministry under Bijoy Krishna Handique has been working towards the same.
The adoption of the National Mineral Policy will act as the harbinger. Minister is aware how China has managed to virtually colonize Africa for exploring mineral wealth. In fact barring Thailand the resource rich countries in the South East Asia - Myanmar, Cambodia - have all been providing resources to China. India has failed in the past in building a durable relation with Myanmar for instance thanks to conflicts between our own ministries - Ministry of External Affairs and the Ministry of Petroleum and Natural Gas. Hopefully the decision makers will listen to the matured voices like minister Handique’s and work resolutely for a long term policy on resource exploration and utilisation.
The government also considered issues like security of tenure and policy on seamless transition; both were viewed as the basic premise for attracting investment into the mineral sector. From the very beginning the Ministry consulted all stakeholders and then drafted the new Act. Thereafter there had been one round of interactions with the stakeholders and commonly accepted principles for legislative changes were evolved.
Based on such discussions the draft Mines and Minerals (Development and Regulation) Act has been harmonized and the same has been circulated to all the stakeholders on September 18, 2009.There are some apprehensions on the draft despite some broad agreements among the stakeholders.
The disagreements cover issues like proposal to do away with the prior approval system for ten non-coal and atomic minerals in the first schedule—these are iron ore, chrome, bauxite, manganese, copper, lead, zinc, asbestos, diamond and gold. Concern has been raised on the need to introduce auction for such deposits which have a proper prospecting and feasibility report. There has also been demand to retain the reservation for PSUs. The other concern was on rationalization of the maximum and minimum area of the mineral concessions and defining the powers of the Mining Administrative Tribunals.
The ministry did not favour reservation which goes against the concept of level playing field, creates several inequities and harms the larger interest of mineral development. The new draft act places great emphasis on sustainable mining, with proper protection of the concerns of the local people. In fact my ministry is under the process of preparing a Sustainable Development Framework for the Indian Mining Sector.
The Framework would be mandatory for all the mining activities in the country and would largely consist of voluntary as well as statutory initiatives. I assure you that the recent initiatives seek to be an integrative process.”
On Naxal problems in resource zones minister Handique offers an integrative approach. “As I said earlier, the new Policy and the draft Act seek to have an integrative approach. The Ministry is of the opinion that at present the States need to translate the mineral resource into mineral wealth, which could drive the economic growth of the region. The setting -up of a dedicated Mineral Fund would enhance the capacity development initiatives at the State level, which in turn would help in making mining activities more sustainable. The proposed Sustainable Development Framework would increase the interaction between the local people and the mining companies, apart from the CSR initiatives.”
The states have received Rs 2,000 crore from the revised royalty rates notified on August 13, 2009. Certainly, the minister knows how to give some and take some by striking a balance.
“I would like to share with you that the rates of royalty and dead rent were recommended by a Study Group which consisted of important mineral producing state governments of Chhattisgarh, Jharkhand, Karnataka, Orissa, Rajasthan. The central Government has accepted the recommendations of the Study Group, and notified the revised rates. The states should be satisfied now.”
The need for modernization of mines has not escaped the minister's attention. “The National Mineral Policy proposes to strengthen the National agencies like the Indian Bureau of Mines (IBM), Geological Survey of India (GSI), and the State Directorates of Mining and Geology to encourage modernization of mining activities. The proposed new draft is designed to attract new investors with high end technology to enter the field. We are considering schemes for incentivizing activities for beneficiation and sintering of low grade ore. Recently IBM has recommended revising the threshold values for certain important industrial use minerals like iron ore, for increasing the optimum utilization of the ore.”
Transparency is critical in working towards a consensus. The ministry under Handique has thus remained transparent in all its decision making process. While nobody can say that any private company benefitted unduly nor can one say that the PSUs were favoured. The ministry has been following the provisions of the MMDR Act while granting mining licenses. It has not granted any iron ore lease to MMTC. “The ministry had received a request from MMTC for reservation of area in Karnataka for undertaking mining activities. The Ministry has not received any request directly or indirectly from L N Mittal group in this matter. The ministry had considered the request of MMTC and had decided to close the case.”
On the NGOs acting against the Niyamgiri mines of the Vedanta Group, cleared by the state and central governments and examined and okayed by the nation’s Apex Court the minister feels, “The misgivings of the NGOs are unfortunate.”
There is no reason to call minister Handique as a friend of the Aluminum giant since the same ministry has refused to sell 49 per cent of BALCO stake to Sterlite.
“Government of India had divested 51 per cent of its stake in BALCO alongwith transfer of management control in favour of Sterlite Industries (India) Ltd, the strategic partner in March 2001. As per provisions of Shareholders Agreement (SHA) signed at the time of disinvestment, M/s SIIL exercised call option in March 2004 for acquiring the remaining 49n per cent shares of BALCO.
However, in view of the opinion of the Attorney General, given in March 2006 that the call option and valuation date provision were ultra vires of section 111 A of the Companies Act, the call option was repudiated. According to the section there cannot be any fetters on the rights of a shareholder of a public limited Company to sell its shares freely. Presently the matter is under the consideration of a three member Arbitral Tribunal.”
The ministry is organizing an Investor’s Meet and Conference for Development of Mineral Resource and Mineral Based Industry in North Eastern Region on 6th and 7th of November to explore the mineral prospects in the region. North East is rich in Uranium—the state government of Meghalaya is now consulting the Atomic Energy Commission for exploring the same.
Coal in Meghalaya and Nagaland are said to be of good quality. Both states are examining the ways and means of bringing the mining activity under the state governments. Jiajuri region of Assam is rich in Silica Sand and can have a base for glass industry. Minister Handique is from the region and also holds the charge of the ministry of DONER (Development of North East Region). He has assigned the task to GSI and MECL (Mineral Exploration Corporation Limited).
“GSI will undertake exploration for: Assessment of Iron Ores in East Garo Hills district, Meghalaya, Investigation of Platinum group of elements in Ophiolite belt of Nagaland and Manipur, MECL will carry out detailed exploration for glass sand in Nagaon district of Assam and also Rupa Dolomite prospect in Arunachal Pradesh.”
The Centre is concerned over illegal mining and the damage to the national resource and environment as a result. While mining leases are granted only after proper environmental clearances and IBM inspects such mines regularly there have been instances of illegal mining activities.
“In Bellary in Karnataka, certain instances of illegal mining in forest areas had been noticed by the State Government. The Lokayukta of the state government investigated the same and took punitive actions against the State officials. Further to curb the menace, the central government has asked the states to use satellite data to tackle the menace of illegal mining. Apart from this, the central government is examining the legality of initiating direct action in case of such illegal mining.”
Minister Handique has all the right intentions. But finally the success of using national resources in a sustainable manner and for the growth of the national economy depends on the ability and willingness of the local administration to enforce the rules and processes. This needs bringing in all the stakeholders and participation of the locals as well. The ministry under Bijoy Krishna Handique has been working towards the same.
The adoption of the National Mineral Policy will act as the harbinger. Minister is aware how China has managed to virtually colonize Africa for exploring mineral wealth. In fact barring Thailand the resource rich countries in the South East Asia - Myanmar, Cambodia - have all been providing resources to China. India has failed in the past in building a durable relation with Myanmar for instance thanks to conflicts between our own ministries - Ministry of External Affairs and the Ministry of Petroleum and Natural Gas. Hopefully the decision makers will listen to the matured voices like minister Handique’s and work resolutely for a long term policy on resource exploration and utilisation.
Next Story
