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Friday, September 30, 2011

India’s New Mining Bill: Worries of A Nobody


Its official then: Indian government is ready the table Mineral Development and Regulation (MMDR) Bill, 2011 - a draft law that allows local people get the financial benefits of mining activities.

The bill, passed today by the union cabinet, asks coal mining companies to pay 26 per cent of their profit after tax to “district mineral foundations” (DMFs), to the district administrations. The money, collected by district collectors, is to be spent on development projects for the locals, mainly tribal communities residing in the mining areas. Roughly put,  the mining firms will pay approximately Rs 10,000 crore a year to the 60 districts (about Rs 1.7billion a year to each), once the bill is enacted.


Undoubtedly, it’s a historic move, to provide justice to scores of tribals who have lost and continue to lose, their land and livelihood across the country due to mining activities. But happy though I am, there are doubts rising in my heart: this new bill, will it just end up as a dud? Will all these hope building just fall flat in near future? 


My first specific worry is, will this law ever see the light of the day, considering that Federation of Indian Chambers of Commerce and Industry (FICCI) – the all powerful industry body, has already opposed it?(According to FICCI, if coal companies share 26 per cent of their profit, it will lead to an increase in the price of coal and result into investors shying away).

That FICCI’s opposition has moved bricks, is proven by the fact that the exclusion of the non-coal mines (Companies mining other than coal — such as iron ore, manganese or zinc) from sharing their profits.

When the drafting of the bill started, the plan was to have a uniform mandate for all mines. But, later the Group of Ministers (GOM) working on the draft insisted on this change. Obviously, this lobbying isn’t going to stop now the bill is all set to go to the parliament?

My second worry is about the National Mining Regulatory Development Authority -which the government proposes to set up once the Mine bill comes into effect. How independent and strong will this body be to decide on the crucial issue of fixing the royalty for minerals?

Last but not least, will this bill be enough to crush the biggest devil of all - the illegal mining?

In this country, more people have been displaced by illegal mining activities than the legally done ones. Walk around the country and you will find displaced people even in places where there is no “official” mining activity.

A small example is in Meghalaya state of the North east, which has a decent amount of coal deposit. Officially, coalmining has stopped since 2008 (note that the new ‘60 district’ coal mining list doesn’t include Meghalaya), but over a hundred families have been displaced, thanks to the rampant illegal mining, in South Garo Hills, bordering the Balpakram National Park alone.

And then there are miners like Janardan Reddy and Co. who bleed the country of millions and manage to stay out of the legal net for years. Who and what will prevent such menace?

Back to the draft law. The government says that by bringing this law, it is moving away from ‘scientific mining’ to ‘sustainable mining’. Come the winter session of the Parliament and we will know how serious our MPs are about creating this sustainable environment. 

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