Opinion Back to the mines

Mining was a low-key industry till the late ’80s,until neighbouring China woke up to its infrastructure needs in the early ’90s,which triggered the boom for its steel utilities. In their quest for raw material security,the Chinese steel mills began to buy iron ore from Indian miners,even at exorbitant prices. This in turn ignited a mad scramble for ore mines in India,making policy-makers understand the need to reform the dig-and-sell mining sector. Concerns persist on the lack of transparency in allocations of mining leases,containing the illegal mining mafia,who have both money and muscle power,tapering off iron ore exports besides the need to streamline the sector’s growth,which the Mines and Minerals Development and Regulation Act 1957 has failed to ensure. While a first-come-first-serve policy continues to be the guiding principle in allocation of leases,there has been no thought in the Mines Ministry towards exploring the efficacy of granting leases through a transparent auctioning process.

• What is the larger direction for reform envisaged by the government?

Having realised that the sector indeed needed reforms,the government attempted to devise strategies to facilitate the mining sector’s growth,and at the same time,remove some obvious anomalies. While beginning due diligence on the sector,the government realised that the sector was a complex one,where ore prices were aligned to international prices and nearly 80 per cent of the mining zones were located in the forested areas inhabited by tribals.

There was a need to ensure their well-being. UPA-I appointed a high-level committee under former Planning Commission Member Anwarul Hoda to make recommendations for a fitting national mineral policy,which the committee did in 2006,suggesting changes in the Mineral Policy 1993 to attune it to the present requirements of the world economy. It suggested an evolution of the mining code adapted to the best international practices,streamlining and simplifying of procedures for grant of mineral concessions to reduce delays,strengthening the infrastructure for mining activities and recommendations on other issues for improving the environment for investment in the mining sector.

• What concrete steps have been taken?

Acting upon these recommendations,the government formulated the Mineral Policy 2008. In the past year,the Mines Ministry has initiated a series of steps to reform the sector including notifying revised rates of royalty in respect of minerals in August 2009 on an advalorem basis,and circulated guidelines to the states in June 2009 to streamline the grant of mineral concessions. The ministry also formulated and circulated a Model State Mineral Policy to all states for revising or formulating their mineral policies in terms of the National Mineral Policy 2008 for scientific and systematic management of mineral resources. It also appointed a consultant for preparing a draft Sustainable Development Framework for the Indian Mining Sector.

Besides,the ministry has constituted a coordination-cum-empowered committee at the Centre which includes representatives from Environment and Forest,Defence,Home Affairs,Steel,Directorate General of Civil Aviation,Indian Bureau of Mines and Geological Survey of India to monitor and minimise delays in grant of mineral concessions.

Most importantly the ministry has drafted a new legislation titled Mines and Minerals (Development & Regulation) Act,2010,which it argues would be a comprehensive way to promote regulated growth of the mining sector. The legislation envisages full transferability of concessions to encourage exploration,specified time limits with enforcement through a tribunal,granting large area prospecting licences to promote high technology in exploration,ensure a level playing field with reservation only for conservation and finally a mining tenement system and uploading exploration data on Internet.