Need for production cap in new Indian mineral policy flagged

KOLKATA (miningweekly.com) – With a new National Mineral Policy (NMP) in the works, India’s Ministry of Environment and Forests (MoEF) has flagged the need for mineral production caps to be set.

The Ministry has said that since the focus in the revision of the NMP 2008 is on sustainable mining, environmental protection and preventing illegal mining, production caps for respective mineral extraction may be needed to prevent the encroachment of mining operations on farmland and into forest areas.

The Mines Ministry has entrusted a committee, headed by K R Rao to prepare a draft of a new NMP by October 31.

In the course of two rounds of meetings convened by the Mines Ministry to review the older version of the policy, its counterparts in the MoEF have pointed out that while mining of iron-ore and manganese dominated the administrative space, unorganised and largely indisciplined mining of other minerals like limestone, dolomite and sand minerals posed a  great risks to people and land.

Backing the demand for a production cap on mineral extraction, the MoEF said that the Supreme Court itself, which in an August verdict had called for a fresh approach to mining policy before the end of the year, had imposed yearly production caps on iron-ore extraction in the mineral-rich provinces of Karnataka and Goa in the course of hearing cases against illegal mining.

Against such a backdrop, production caps across minerals and a consultative process with the MoEF in approving mining plans for each mining lease holder would be in line with the Supreme Court's thinking, an official said.

However, according to sources privy to discussions, there was no clarity yet on whether any cap on production in mineral extraction would be across the board or whether specific limits would be incorporated into each mining lease.

A section within the government maintains that instead of a blanket industry-wide aggregate production cap, as is currently in place for iron-ore extraction in Karnataka and Goa, production caps should be set per mining lease as geographical parameters differed from one lease hold area to another.

Some of the other points under consideration by the K R Rao committee include direct allocation of mining leases to companies that have either set up downstream value addition plants or commit edsuch investments while bidding for mining lease.

The committee is also considering increasing the tenure of mining lease hold to 90 years from 50 years, with an initial validity of 50 years and two extensions of 20 years each following performance reviews.