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Building India: Cartelisation, higher prices, green challenges clutch sand mining sector

Mines ministry launched sand mining framework last month to assist state govts in addressing sectoral woes.

Written by Deepak Patel |
Updated: April 4, 2018 2:35:45 am
mining sector, sand mining, illegal mining, Rajasthan ilegeal sand mining, Mining industry, Cartelisation, Indian express With significant demand-supply gap in the sector, Ministry of Mines believes that states should analyse alternate options for river sand.

Indian sand mining sector has been suffering from illegal mining for many years and the state governments have been finding it difficult to combat it effectively.

Last week, after receiving some input on illegal sand mining operations, when a deputy superintendent of police (DSP) was patrolling near a state highway in Dholpur district of Rajasthan, two rounds were fired at his vehicle. According to a recent analysis of Ministry of Mines, the sand mining sector is ailing from the following challenges: cartelisation among mining companies during auction, non-availability of sand in many cities leading to higher prices, mixing of low quality sand with usable sand leading to construction of weak buildings, and significant environmental damage due to illegal sand mining.

“Issues of illegal mining, environmental damage, high sand prices and quality of sand that are interlinked with each other are prevalent across many states,” mentioned the Ministry of Mines in its ‘sand mining framework’, which enumerated the aforementioned challenges. The ministry launched the framework last month to assist the state governments in formulating “appropriate” policy and administrative systems to address the issues of the sector. The Indian Express has reviewed the sand mining framework. Sand mining is regulated by the respective state governments in India.

“Non-availability of sand and sky-rocketing price of sand are two sides of the same coin. Due to the population growth and the resultant construction activity, there is a huge demand for sand in the country. In some of the cities, where there are no nearby sand reaches, it creates a huge demand-supply mismatch,” the framework stated.

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“This mismatch coupled with cartel formation among the miners and transporters and in absence of robust monitoring mechanism or regulation by the Government has led to sky-rocketing prices of sand in these cities, such as the prices of sand in Bengaluru and Mumbai are in the range of Rs 70,000 to Rs1,00,000 for a single truck of 30 tonnes. High sand prices, has led to mixing of low quality sand with the usable sand that is delivered to consumers who are generally not aware about the quality of sand. The low quality sand is not suitable for construction purpose and poses a risk to human lives using the structures made by it,” it added.

Sand is a ‘minor mineral’ as defined under the section 3(e) of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act). Section 15 of the MMDR Act gives complete powers to the respective state government regarding the formation of rules related to the grant of mining leases of minor minerals. Moreover, section 23C of the MMDR Act empowers the state government to frame rules to prevent illegal mining of any major or minor mineral. Minerals such as coal and iron ore are considered as ‘major minerals’.

On cartel formation, the framework stated: “Although state governments have started allocating the blocks on auction basis to bidders in the states, but to manipulate the supply and to control the prices, bidders may form cartels to keep their margins high. In absence of any robust mechanism, its tough to control cartelisation unless the sale rights are with the state governments.”

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