The Mines and Minerals (Development and Regulation) amendment ordinance got the President’s assent on January 12 last and was published in the Gazette of India by the Ministry of law and Justice. The ordinance promulgated to further amend the Mines and Minerals Development and Regulation Act, 1957 which was last amended in 2012.
It is the ninth ordinance by the NDA Government over last seven months including the Coal mines special provision ordinance promulgated twice. The ordinance was necessary to intervene in the emergent problem of the mining sector to increase in the production and bring balance in the import of minerals.
While the mining industry has seen this as a major favorable shift for private and foreign direct investment, the mineral bearing States have raised questions over resource ownership and management in a federal structure like ours. It is matter of grave concern for mineral bearing backward States like Odisha where mineral resources have been playing a substantial role in the political economy of the State and seen as a source of economic development. In the past few years, along with displacement and environmental issues, the illegal mining, lease and renewal process have been challenged by court judgments leading to closer of mines. It has affected the livelihood of mining workers in iron ore, chrome and coal sectors in major mineral districts like Sundargarh, Keonjhar, Jajpur, Angul, Jharsuguda and other parts of the State in particular and the State economy in general. Many trade unions have registered their protest against closer of mines.
The Saha Commission of inquiry on illegal mining has unfolded many serious dimension of the mining industry in the State. The Centre–State relation over mineral resources can be referred to the earlier Commissions, i.e. The Sarakaria Commission of 1988 and Anwarul Hoda report of 2006. It has been questioned that whether the rights of the mineral bearing States over the major minerals can be more recognized by such amendment or it is heading towards more centralization in the name of economic growth. As it is argued that the mineral bearing State should have greater say in allotment and auction of lease, they need to be democratically consulted in such matter.
It is further said that whether the amendment has adequately addressed the issues of people of different socio-economic groups in mineral bearing areas by dealing it with special care while recognizing their contribution to national development. Therefore debate and discussion over the amendment ordinance is quite relevant from the prospects of mineral bearing backward States like Odisha and the people in mining areas.
The share of Odisha in terms of value of mineral production in the country is highest in the year 2013-14. The State has 94 per cent of the chrome and nickle, 52 per cent of bauxite and about one third of the coal, iron ore and manganese reserve of the country. There are more than five hundred mining leases in operation covering an area of one lakh thousand hectares. The lease holders include the Central Government owned public sectors undertakings such as Nalco, MCl, NTPC, Hindustan Rare Earth ltd, SAIl, State owned public sectors like Odisha Mining Corporation and Nilachala Ispat Nigam ltd, besides a number of corporate, private- owned companies of Odisha and outside.
The major change through the amendment ordinance of 2015 is the auction system to attract the private FDI to mineral sector while there is continued provision for reservation for the public sector.
The second major change is that the lease period in case of minerals, other than coal, lignite and atomic minerals, has increased from 30 years to 50 years and it has abolished the renewal of any mining concession. On the expiry of the lease period, the lease shall be put up for auction as per the procedure. It has to ensure power to the Central Government to intervene even where the State Government does not pass order within the prescribed time limit in order to speed up the matter. In case of captive mines, it has given more protection by fifteen years of transition period, which is more than the merchant miners, without sudden stoppage, in order to boost the mineral based industries that are getting affected with the earlier lease process.
As relaxation to mineral bearing States, the amendment denied prior approval needed from Centre for States in case of ten minerals mentioned in Part C of the 1st Scheduled of MMDR Act, 1957 which includes metallic and non metallic minerals such as bauxite, chrome ore, gold, iron ore, manganese and copper etc. In order to check the illegal mining, the penal provision has been made stronger in terms of imprisonment for five years and fine of Rs5 lakh per hectare of area.
There is provision that the States have to set up special courts to undertake speedy fast-track trial of case related to illegal mining. The special courts will have powers of court of sessions. The Judge of the special court will be appointed by the State with concurrence of High Court.
The new provision in the MMDR amendment ordinance is that it has made provision of District Mineral Foundation (DMF) which has been a demand by the people of mining areas who are getting affected in many ways due to mining activities. Though they have been losing land and livelihood and facing the brunt of water, air and sound pollution in the name of national development but their plight has not been addressed in a special way as a matter of national interest. The objectives of DMF shall be to work for the interest and benefit of persons and areas affected by mining operation. The holder of mining lease or prospecting licences cum mining lease has to pay an amount to the fund of DMF which shall be less than one third of the royalty as per provision or as may be prescribed by the Central Government. It is further said the composition and function of the DMF shall be decided by the State Government. The State Government will prescribe the payment to be made by the lease holders of minor minerals to DMF of the district in which the mining is taking place. The DMF is creating hope that the typical problems faced by the people and the area can be tackled with such dedicated fund placed locally at the district level because it has been observed that the fund generated due to mines such as royalty is not percolating to the locality and mostly spent at the State level. There is also provision of setting up National Mineral Exploration Trust with 2 per cent of the royalty to be paid by the lease holders for the purpose of mineral exploration.
As addition to the principal act, the amendment has recognized the role of Central Government in reduction of waste and waste management practices. It also said that the Central Government shall have power to issue direction to States for minimising and mitigating adverse environmental impact in respect of ground water, air, noise and land pollution. The problem of abundant mining and mined out land and its further use by local communities is well placed in the amendment ordinance.
The Government of Odisha has done nothing in its last fourteen years of presence so far as mines and minerals are concerned. It should carefully go through the amendment ordinance and raise such pertinent issues of concern in the interest of the State. There will be scope of representation when the amendment will be laid in each House of Parliament.
(The writer is a rights activist who can be contacted at ojaabbsr@gmail.com)