Key initiatives of new Mineral Policy 2019

October 2019
Key initiatives of new Mineral Policy 2019

The major focus of the new Mineral Policy preparation was to guide the mining sector to function with utmost environmental and social responsibility, prevention of illegal mining besides economic considerations, discusses Bhanu Prakash Bhatnagar.

The honourable Supreme Court, in its judgement in August 2017, made critical remarks that the National Mineral Policy existed that time, i.e. National Mineral Policy 2008 effectively could not deal with the challenges of the mining practices followed in India. It is not effective to stop the illegal mining activities prevailing in various States and asked the Indian Government for the development of a new mineral policy, which deals with many fundamental problems associated with mining activities, than fulfilling the mining sector's economic mandate. The major fundamental problems included areunscientific mining, poor track records of environmental and social performance, and high instances of illegal activities.

The new Mineral Policy 2019
The major focus of the new Mineral Policy preparation was to guide the mining sector to function with utmost environmental and social responsibility, prevention of illegal mining besides economic considerations.The policy formation took more than one year, and has finally been developed is actually one that is a win-win for mining companies and investors for keeping promises towards instruction of honourable court and economic considerations. The policy document mentions that mining should be environmentally sustainable and equitable;it shall ensure environmental protection, ecological conservation and protect people's rights in the mining areas.

The policy has a focus to ramp up mineral production massively, under the umbrella of "ease-of-doing businesses" and attracting investments. A number of mechanisms have been proposed to ensure this.

Finally, the new National Mineral Policy (NMP) 2019 was announced by Government of India, in March 2019. The major outcome expected from the policy proposals is to "increase the production of major minerals (in value terms) by 200 percent in seven years". The target is tied to the current Government's "Make in India" initiative and to boost India's economic growth by way of increasing the share of the manufacturing sector in the economy. The key vision of the new policy is an increase of domestic mineral production in a big way, which requires a holistic development of mineral sector on a sustainable basis in order to fulfil the demand of downstream industries dependent on mineral/ore supply and reducing trade deficits in the mineral sector during these seven years.

The objective of this policy has been linked with transparency, better regulation and enforcement, balanced social life and economic growth as well as sustainable mining practices. It is evident thatin mining, the possibilities of adverse effects on the environment are quite high, as the activities involved are against the nature.If these adverse effects are not contained or reduced to minimum, and the negative impact of mining could not be controlled. Sustainable mining is crucial for the promotion of inclusive growth of nation.

NewMineral Policy has inclusive approach for effectively regulation of minerals, Roles of State in Mineral development, prospecting and explorations, comprehensive database for mineral resources, scientific mining methods, thrust on infrastructure development, protection of environment, sustainable development of mining sector, welfare of project affected persons, R&R, effective mine closures, safety, mineral security, achieve with R&D activities and finally attracting foreign trade and investment for mining sector.

The major proposals of the mineral policy is:

  • Boost to "Make in India" Initiative with aim to increase the share of the manufacturing sector in the Indian economy
  • Holistic development of mineral sector on a sustainable basis to fulfil the demand of downstream industries dependant on mineral/ore supply
  • An increase of the production of major minerals (in value terms) by 200 per cent in seven years
  • Reduction of trade deficit in mineral sector by 50 per cent in seven years

Key initiatives of the policy that can be elaborated as focus on to:

  • Emphasis on suitably strengthen the regulatory agencies through capacity building measures in terms of adequate manpower, technology, equipment and skill set
  • The needs of domestic industry are full met keeping in mind both present and future needs
  • Attract private investment through incentives. Increase trust level among state agencies, miners, local communities and other stakeholders through a open, fair, better regulated, responsive and inclusive policy making
  • Identify critically fragile ecosystems and declare such areas as "no-go areas"
  • Encourages merger and acquisition of mining entities, and transfer of mining leases
  • Harmonising royalty and all other levies and taxes with mining jurisdiction across the world
  • Simplifying the clearance process and making it time-bound
  • Long term export-import policy for the mineral sector to provide stability for investing in large scale commercial mining activity
  • Ensuring welfare of mining-affected people/communities and ensuring rehabilitation and resettlement, by suitable implementation of all relevant acts/rules
  • Concept of exclusive mining zones, which will come with approved, in-principle clearances to curtail delay in commencement of mining operations.Main in-principle clearance is tied to forest land diversion for non-forestry purposes
  • The policy mentions that in case of delay, there shall be provisions for the project proponent to "generate triggers at higher level" in the online portal of clearances
  • Proposes development of an over-arching inter-ministerial body, under the aegis of the Ministry of Mines, to institutionalise mechanisms of sustainable mining and adequate concerns for environment and socio-economic issues. The body will also advise the Government on rates of royalty, dead rent etc.

Unsolved issues in current mineral policy:
The policy should have guided for framing of effective synergybetween the environment clearance and forest clearances processesto remove a fragmented approach while evaluating mining project impacts. In policy, the post-clearance monitoring also not been strengthened. The entire process has become a bureaucratic paperwork, with little focus on protecting environment and community.In all these, the only exception that the policy has mentioned about the "critically fragile ecological areas', which it says should be declared as "no-go" and "inviolate', to keep out from mining. For all other areas, 'easing development' is the prerogative.

The policy should have given guidance for specifying standards and outlining mechanisms for pollution monitoring in mining areas under the concerned laws. This should have at least been suggested for minerals which are having significant production, and have higher potential to cause environmental pollution. Although the Policy mentions about the protection of environment during extraction of minerals and to take a comprehensive view to protect forests, environment and ecology and to conserve the biodiversity. It also mention to use "renewable sources of energy at mining sites" to reduce pollution, carbon footprint and operational costs.

The policy has little mention on providing necessary guidance to ensure effective mine closure practices. Atpresent, law only ask for financial assurance in mining plan process (Rs 3 lakh per hectares for A category mines and 2 lakh per hectare for category B mines, which have been granted on a non-auction basis in MCDR 2017), for taking care of proper mine closure which is the current financial assurance for this is insufficient.

The Policy needs elaboration on providing necessary guidance on few fundamental concerns towards a strong guiding document to ensure environmentally and socially responsible mining as the Supreme Court had intended.This includes ensuring welfare of people in mining areas and securing their rights, it must improve mechanisms of giving various clearances, management of environmental pollution and preservation of natural resources, with which the lives and livelihoods of these people are intricately related.

It is prayed that the new Mineral Policy will address above issue to a large extent with improvement in environmentally sustainable mining practices. Sustained education is required to prevent and control environmental degradation in mining sites. Three things have been emphasised in the New mineral policy i.e. relief and rehabilitation of displaced and affected persons, devolution of mining benefits to project affected persons through District Mineral Foundation (DMF), and ensuring welfare of tribal communities.

The policy has also emphasises on implementing all the provisions of rehabilitation and resettlement as outlined in the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR) Act, 2013.However, given the focus for easing mining and attracting investments, ensuring the welfare of communities can only become postscripts of such activities.Sanctions, clearances and penalties should also be included by the government in making laws such that offenders of the same will be punished accordingly. Forest Department, Environmental Department, Mining Department, District Administration can play leading roles in the facilitation process.

ABOUT THE AUTHOR: The article is authored by Bhanu Prakash Bhatnagar, Head Mining, Adani Cementation Ltd, Adani Corporate House, S.G. Highway, Ahmedabad.

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