Mine auctions should happen only after all clearances are obtained

coal mine in India
A coal mine. India needs a flexible mining policy that is also transparent.

The Union government should constitute a committee to study mining policies in other countries and create area-specific policies for different parts of the country, says BRV Sushil Kumar, government of Telangana, and chairman, Mining Engineers Association of India Hyderabad chapter, in an exclusive interaction with Anisha Nayar Dhawan. Edited excerpts:

In India, mining policies are made in reaction to what has happened in the past. Is there an effort to make them pro-active and forward looking?

Five years have passed since the mineral policy was made. Of course, we would like to revisit the policies. The policy unveiled in 2019 will now have to be put up before all the stakeholders and state governments. So, there will be a better policy and better rules can be made against MMDR Act, 2015. I cannot discuss the minor mineral policy for Telangana as it is yet to be approved by the legislative assembly. The existing policy in Telangana is ‘first come first served’.

READ: Interview: Cutting logistics cost key to steel industry’s future

If the mining policy calls for auctions, how can your state have a first come first served policy?

The major minerals for industrial purposes can only be allotted through auctions, while minor minerals for building materials, sand and granite can be allocated differently. The central government has empowered the state governments to make rules for minor minerals.

What is the long-term vision for the policy for minerals?

The Union government will have to take a relook at the MMDR Act, 2015. Currently, all major minerals are allocated through auctions. The Centre should set up a committee to go around the world, study policies in other mineral rich countries, and decide what is good for India. I feel there should be a mix of auctions, allocations and a different policy for private/forest lands.

The government is auctioning bulk minerals. For strategic minerals such as gold and diamonds, the auction process will fail if you cannot prove the deposit to the last carat/tonne.

Are you suggesting a policy with flexibility? Does this go against the need for transparency?

There were two Supreme Court judgements during 2G scam and coal scam. One judgement was that the government should grant natural resources only through auctions, while the other was that if all natural resources need not be allocated through auctions, it can be done in transparent manner. For strategic minerals like gold and diamond, you can give reconnaissance permit. Then foreign companies and FDI will come in and then the exact tonnage of gold, diamond carats can be evaluated.

READ: Uniform stamp duty, raw material prices key to steel sector growth

Currently, we are auctioning bulk minerals without taking into account what category of land is offered. If there are forest lands, tribal lands and private lands involved, the entrepreneur may find it difficult to acquire land. We have started with the geo coordinates to be taken up for both minor and major minerals for all mining leases and co-leases. Once it is done, we do an exploration planning for extended areas that can be mapped.

A big problem for miners is the delay caused by several clearances…

The auctions should happen after all clearances are attained. Currently, we demarcate an area, estimation of the reserves is made and then auctions are announced. The government collects 0.5% of the mineral value and leaves the miner alone to secure all the clearances. It is like penalising the entrepreneurs.