Mining licences: Stuck green nods raise litigation worries

Delay in granting mining licenses, after the introduction of the new mining law, may compel firms who had earlier obtained LoIs from state govts to move courts.

Written by Deepak Patel | New Delhi | Published:October 19, 2016 2:12 am
new mining law, india mining law, mining proposals, environment ministry, environment protection act, india new The Central government is worried that these companies — who must get their MLs by January 11, 2017 — would go to the courts in case of any delay.

Several major steel and cement companies have not been granted mining licences (MLs), for which the letter of intents (LoI) were signed with the respective state governments in 2014 or before, primarily due to the absence of environmental or forest clearances. The Central government is worried that these companies — who must get their MLs by January 11, 2017 — would go to the courts in case of any delay.

“The applications, which will lapse on January 11, 2017, due to want of clearances, may lead to several litigations. Thus, all concerned must make all necessary efforts to expedite these cases,” said Balvinder Singh, Secretary, Union mines ministry, in a meeting with senior officials of the Ministry of Environment, Forest & Climate Change (MoEFCC) and various state governments, on September 27.

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Major companies such as ACC, Ultratech, Jindal Steel and Power Limited (JSPL), Arcelor Mittal India and Steel Authority of India (SAIL) are waiting for MLs for more than two years. Their applications are unique as they were under process either with the state government or the Centre even before January 2015, when the new mining law came into effect.

Under the old law, the firms were granted MLs by the states on a discretionary basis. The new law introduced a new way of granting MLs — through auction. To avoid putting the whole sector in a limbo, the new law — Mines and Minerals (Development and Regulation) Amendment Act, 2015 — had a provision for the applications already in process under the old law at various levels of government machinery.

new mining law, india mining law, mining proposals, environment ministry, environment protection act, india newWhile the new law stipulated that all licences henceforth would be granted only via auctions by the respective state governments, it also said that if any firm was issued a LoI by the state under the old law, the ML for that block should be directly granted by January 11, 2017. Moreover, if any application has been approved by a state government under the earlier law, but got stuck with the Centre, the ML for that too was required to be issued by January 11, 2017.

Heading to courts

While some companies are keeping their fingers crossed, others are ready to move courts to get their MLs. JSPL has put in the applications for two mines — one is a limestone mine in Bilaspur, Chhattisgarh, and another an iron ore mine in Ghatkuri, Jharkhand. However, these applications are not getting forest clearance. “We at JSPL are working towards obtaining all the necessary clearances and are very hopeful that appropriate action will be taken by the respective authorities towards the grant of mining leases in respect of the said blocks allocated to us,” said the JSPL spokesperson in response to the queries from The Indian Express.

While JSPL did not say what it will do in case it does not get the mine by January 11 next year, Jayaswal Neco — which has got three of its application stuck for the want of forest clearance —is ready to take the government to court.

“The efforts of state and Central governments as far as the Ministry of Mines is concerned is appropriate, however, the other ministry ‘MoEF’ (Ministry of Environment Forest & Climate Change) which is to grant FC (forest clearance) and EC (environmental clearance) … is unable to relax the provision of law to save this cases. Hence all the effort of mines ministry to expedite the execution of mining lease is becoming futile. If the commitments of the government is not honored and the mining lease is not granted, then the company will be compelled to approach the appropriate court for justice on the matter,” said S K Moitra, president, Jayaswal Neco.

Although the mines ministry data says that the company needs forest clearances in order to get MLs for three mines, Moitra said that the company requires an environmental clearance and not forest clearance.

Ultratech — the largest cement company in the country— is waiting to obtain MLs for six different limestone blocks. According to mines ministry, five of these applications are for limestone mines in Gujarat — two are stuck with MoEF, two at the state-level and one has to be processed by the company itself. The sixth limestone mine is in Chhattisgarh; the application is stuck with MoEFCC.

ACC, another major cement company, has put in two applications for limestone mines — one in West Singhbum, Jharkhand and the other in Kadapa, Andhra Pradesh. Both the applications need an environmental clearance and are pending with respective state governments. ACC and Ultratech did not respond to the queries from The Indian Express.

According to mines ministry, a total 137 such applications are pending for the want of environmental or forest clearances. While the ministry is pushing for provisional clearance, the environment ministry has told it that any such clearance given to the company is likely to create more problems later.

“Gyanesh Bharti, Joint Secretary, MoEFCC mentioned that such a provisional clearance can lead to issues if the final clearances under Section 2(ii) are not forthcoming; the lease holder (company) would end up in loss because he would not be able to take up mining operations in any portion of the land and the entire efforts made by them could go futile. Having paid NPV (net present value) for the whole land, it is possible that the Project Proponent (company) would move the court in frustration,” said the minutes of September 27 meeting.

While some companies are contemplating legal action, others are in the mood to wait and watch. On the other hand, the environment ministry is reluctant to grant provisional clearances and state departments are moving at their own speed. It is clear that the situation requires some clear and consolidated action as January 11 is coming near.