The Ministry of Mines has rightly put the onus on state governments to facilitate clearances to remove roadblocks for expansion of mining
The Central government has mooted radical provisions in mining laws so as to enable India replicate the enviable efficiency of advanced mining geographies in maximising minerals output with the long-term objective of increasing the mining sector’s contribution to the country’s GDP.
Onus on state governments
Notably, an extremely timely Ministry of Mines circular dated June 3, 2020, states that the onus is on state governments, under the revenue sharing mechanism and the forward ascending auctions policy, to apply as the “project proponent” for environment and forest clearances and transfer the same to successful new bidders.
With about 20 approvals that are yet to start operations, the Ministry has directed state governments, with an eye on “facilitating ease of business”, to fast-track operations at mines with “pre-embedded clearances.”
Removing the Hurdle?
A long-standing roadblock related to obtaining environment and forest clearances from concerned state governments has been addressed forthwith, with the initiation of a “major policy intervention” through amending the MMDR Act of 1957 through the Mineral Laws Amendment Act 2020 “wherein the valid rights and approvals of the previous lessee of brownfield projects” are being sought to be seamlessly transferred to the new lessee (the successful bidder) on condition that the new mine operator has to get the licenses cleared during a two-year window period.
To carry through this facility over to greenfield mining projects the government has extended the scope of pre-embedded clearances.
Vital takeaway
New bidders can carry on mining uninterruptedly even as sarkari clearances are in the process of being issued. This, therefore, is a major step towards clearing obstacles in the path of unhindered mineral production – a provision that the mining industry would surely welcome with open arms.
Incentive?
Next, this “pre-embedded clearance mechanism” that has been put in place is expected to be a big attraction for prospective miners facing procedural delays in obtaining statutory clearances resulting in interminable disruptions in minerals production.
Experts contend that this happens to be a huge disincentive for miners. Quite justifiably so.
A senior executive in one of the country’s oldest and most reputed coal trading houses, Karamchand Thapar & Sons, argues that such a restrictive mechanism is simply unthinkable in an advanced economy with core mining expertise such as Australia.
Impact
SteelMint had reported in January that the Confederation of Indian Industry (CII) in a study report titled “Towards a Globally Competitive Minerals & Mining Industry” had stated that processes and clearances are seen as major impediments to the development of the mining sector.
The report stated: “Clearances are tedious and subject to huge time delays. CII recommends that the states should be mandated to obtain in-principle clearance from the forest department as well as the Central environment and forests ministry prior to offering a block for a concession. The government should declare upfront all applicable restrictions on the block in the bid documents. It is crucial to develop a database of forest areas in mining regions; segregate the forest areas into ‘low density’, ‘medium density’ and ‘high density’ so that the time taken for obtaining clearance is related to the forest type.
Adopting a ‘deemed approval’ approach for ‘low density’ forests could also be considered.”
The Ministry of Mines has woken up to the need for state governments to facilitate clearances to remove roadblocks for the mining sector. SteelMint believes it is a giant stride in the right direction.
~ By Nirmalya Deb
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