Q: What method you suggest to bring more transparency and institutional changes in the Government organization such as Ministry of Mines and others for sustainable growth?

3 thoughts on “Q: What method you suggest to bring more transparency and institutional changes in the Government organization such as Ministry of Mines and others for sustainable growth?

  1. Sustainable growth in the Minerals sector is possible only when Exploration keeps replenishing the exhausted Mineral Resources/Reserves. Since MIneral Resources in general are non-renewable and finite, subject to market price, extractive technologies and limitations placed by Environmental Laws, there would come a day when the Resources of a mineral or some minerals will not be available.

    Transparency in administration of mineral resources can be achieved by adaopting time-tested business-friendly laws and strictly time-bound grant of licences. Examples of efficient management of Exploration and Mining have been set by Australia, the US., Canada and many other countries. Unfortunately, in India, due to frequent amendments to the Mines & Minerals Act and non-adhearance to mandated time lines in the matter of grant of licences and related clearances have thwarted the growth of the minerals sector and forced the country to depend upon import of even those minerals whose Resources and potential for new discoveries have been amply demonstrated by the GSI, MECL and Private Exploration Companies.

    Changes to adminstrative structure of Institutions such as the Ministry of Mines, Govt of India and Deaprtments of Mines & Geology at the State level as well as changes to the extant Act & Rules governing the grant of Licences, Leases and environmental clearances are required to achieve the Goals or Vision and Self Sufficiency in minerals.

    Reg. changes to the admin structure of The Ministry of Mines and the State Deparatments of Mines and Geology, they shall be headed by a technically competent person and not by the IAS. Regarding changes to the Act the following are my thoughts;

    In the last 5 years, Mines and Geology Departments in most of the States have resorted to cherry picking of areas for auctioning. The average rate of auctioning of blocks for ML & CL, all India, is a trivial 2 per month in the last 5 years!!. Karnataka has not granted even one CL in the last 5 years. With regard to large area reconnaissance exploration there were no takers to NERP, not even one, in the last 5 years!!. The States also did not clear the pre-2015 back log of PLs and MLs under 10A(2)(b) provision. This back log should be cleared on top priority to serve the urgency for creating jobs and reduce the dependency on imports. Overall, the amended MMDR Act-2015 has killed commercial mineral exploration and led to skewed development of mineral resources in the country. Efforts to reduce imports have remained on paper. New mineral resource discoveries did not happen. There were years of delay in granting statutory clearances such as FC/EC. These are good enough reasons to abandon the auction-mode of granting license for mining and prospecting, at the least, for grant of CL (seamless RP-PL-ML).

    The State Mines & Geology Departments are NOT geared up to fast-paced packaging of OGP (Obvious Geological Potential) areas falling within their State. The total area of the OGP is 571,000 sq km. as stated in the NMEP document. It is 6,44,415 as per MoM’s publication titled “Exploration and Mining Opportunities in India-An Investor Guide, dt.Aug.2015 and NMEP Doc. Mining is undertaken in only about 2% of the OGP. If we assume that the States would prefer to Auction 25sqkm blocks for grant of a CL, it would divide 571,000 sq km into 22,800 blocks. If the States prefer to grant CL of say 100 sq km area then, there would be 5,710 blocks to Auction!! Packaging of such large number by the GSI and preparing documentation by the States is a huge task even over the next 5 years. All the States depend upon GSI to do the “Packaging” job. The Mineral Resources which were put on auction were classified on the basis of the obsolete UNFC-1997!!.
    Directors of Mines & Geology of several States have often expressed difficulty in packaging & pricing mineral-bearing areas for Auctioning for CL. The process of “Packaging” is lengthy depending upon whether it is for ML or CL as it involves Prospect-scale mapping, trenching, drilling, Resource modelling, Resource estimation, Resource classification and finally pricing and documentation. FCFS would, at once, transfer all these jobs to the Private Sector and PSUs who would either pick up potential mineral-bearing ground on the basis of knowledge generated by the GSI or State DGMs or on their own. Current Resource-Nationalism statute keeps investors waiting endlessly for State Governments to announce the areas available for ML or CL. Oversees players have lost interest. FDI into mineral exploration has dried up. Even big players have found it difficult to bid for & share revenue on a CL block because, even before defining a mineable Resource the bidder for CL had to commit for revenue sharing!!

    For all the above reasons the Auction route for exploration and mining of Non-bulk, so called deep-seated metals & minerals (other than the 5 Notified Minerals), has remained a hurdle for ease of starting exploration and mining business in the country. India is not in a position to wait. It has to act fast to “Make India Self Reliant” in minerals, at least to an appreciable extent. 23% is reported to be the rate of current rural unemployment. There is pressure to create lakhs of jobs and work towards economic upturn.

    The Hon’ble Finance Minister, while speaking on Reforms in Minerals Sector referred to the Ministry’s intent of introducing “structural reforms to boost growth, employment and bring state-of-the-art technology especially in exploration through introduction of a seamless composite exploration-cum-mining-cum-production regime.” That is the way to progress, not the revenue-obsessed Auction mode. Resource Maximization, Production Maximization and Maximization of Corporate Tax payers should be the Mantra. The Ministry should restrict the Auction route to unencumbered Mineral Resource Blocks.

    The Act is currently over crowded with amendments. All the amendments to the MMDR Act-1957 and MC Rules-1960 and the many new Rules promulgated post-2015 should be consolidated into one comprehensive Act and one book of Rules.

    Declare all Mineral Resource-bearing areas as NO GO for Non-Mineral purposes: Mineral deposits by their very nature are site-specific which means, unlike forests, you cannot “grow” them where you want. They got to be mined where they are found. Quantified Mineral Resources and measured blocks of land identified by any agency as potential for prospecting for any metalliferous mineral shall be declared as NO GO for non-mineral purposes other than Defence of India projects. Such declaration of Mineral No Go areas should help MOEFCC & PCBs to accord Cluster-wise or Corridor-wise FC and EC.

    If these are put in place quickly, I strongly believe that within the next 5 years, our country would be able to make many new mineral discoveries, enhance National Inventory of Mineral Resources and develop hundreds of new Mines of both metalliferous and non-metalliferous Mineral Resources alongside the existing mines. Every mine would serve as a CSR center and create an economic ripple effect. The mines would also serve as Agricultural Extension Service Centers as well as Centers of Industrial Skill development, the beneficial impact of which on rural India could be extraordinary.
    Vasudev.V.N.
    3.8.2020

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  2. Following methods can be useful for better mining business environment in India –
    1. Time line of each approval should be adhered to by the Government( with a legal biding).
    2. No classification of minerals like major and minor etc, Minerals are Minerals.
    3. There should be no role of central government except policy making in the approvals of exploration and mining licenses. All the approval should be by the state governments only.
    4.More and more digitisation will bring transparency and time saving.
    5. Exploration by private companies and government companies can coexist like pre-2015 era.
    6. Auctioning should be done only for the government explored blocks.

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  3. There should be better inter-ministerial coordination among different ministries like ministry of environment and forests and ministry of coal and ministry of mines.
    The areas for Exploration, of mineral should be demarcated ,after discussions with other ministries for sustainable development of natural resources.
    Areas which are to be restricted due to threat for ecology,environmental and wild life should also be decided after consideration of all pros and cons

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