The government proposes to amend the mining law to provide relief to thousands of mining companies affected by the 2017 Supreme Court order that makes illegal and unlawful a mining operation conducted in violation of environment and pollution laws.
Sources said that the Union Mines Ministry may move a cabinet note proposing amend to Mines and Minerals (Development and Regulation) Act, 1957 that would change the definition of illegal mining.
The changes would make any mining illegal only if such activity is in contravention of provisions of the act and rules framed there under and not if mining is conducted without any lawful authority in breach of any law of the land.
Following the apex court orders, Odisha has already slapped fines to the tune of Rs 20,000 crore on iron ore miners. Other states, including Jharkhand, are also contemplating fines. Odisha and Jharkhand have also slapped demand notices to the tune of Rs 50,000 crore on Coal India (CIL) subsidiaries, a move that has the potential to turn the country’s largest coal producer sick.
“This is a welcome development that would save the mining industry in the country from the brink of a total collapse and prevent loss of employment for lakhs of workers. While making changes, government should ensure that benefit does not accrue only to PSUs but also helps private miners, including those currently reeling under the burden of heavy fines imposed by the Odisha government,” an official of Federation of Indian Mineral Industries (FIMI) said on condition of anonymity.
The government’s proposal on illegal mining follows recommendations given by a high level committee (HLC) chaired by Niti Aayog Vice Chairman Rajiv Kumar and consisting of the Cabinet Secretary and the mines, steel, coal, revenue and finance Secretaries. The committee was set up in April to identify key challenges and negate their impact in the mines, minerals and coal sectors. It has given its report to the Centre.
In its recommendations, the HLC has suggested amending Section 21(4) of MMDR Act, replacing the wording “without any lawful authority” with “in contravention of the provisions of this Act and rules made there under”. The changes would help revise penalties for violation of rules related to environment, pollution and other issues and extend relief to mining companies.
Under current law, illegal mining occurs when a person, without any lawful authority, extracts any mineral from any land. In this case, the state government can recover from such person the mineral so extracted, or where minerals have already been disposed of, the price thereof along with rent, royalty, or tax, for the period when illegal mining was done.
The HLC in its report, extracts of which have also been seen by , has said that the judgement (by Supreme Court) had led to raising of huge demands on leaseholders in Odisha and Jharkhand. Other states may also impose similar penalties.
“The fact does remain that compliance above judicial pronouncement is likely to create huge financial burden on mining companies including PSUs and will adversely impact their economic viability,” the report said.
“There are therefore genuine reasons for not penalizing a particular act of default committed under the MMDR Act, which has been committed under any other statute,” it added.
The committee has not said anything about application of the amendment, with prospective or retrospective effect. The industry wants its application from retrospective effect to save the mining companies that have already coughed up Rs 15,000 crore to the Odisha government.