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Mining companies can't get everything for free: Handique

A new mines and minerals bill of the ministry, believed to be opposed by the mining lobby, seeks to give 26 per cent of profits from mining to locals and also to make them stakeholders. Shalini Singh finds out how the stakeholders will be identified and how will the profits be disbursed?

india Updated: May 15, 2010 22:07 IST
Shalini Singh
Shalini Singh
Hindustan Times

Bijoy Krishna Handique, 75, is a cabinet minister in the ministry of mines and ministry of development of North Eastern Region (India). He took over in May 2009. Last year, he introduced the ad valorem royalty on mining, which nearly doubled the state governments' earning from mining. After the Reddy brothers scam, 18 mining licenses were cancelled in Bellary last week. He was unwell owing to a lung infection, but took out time to speak to HT. Union Minister for Mines, Bijoy Krishna Handique, speaks to HT Corespondent Shalini Singh.

A new mines and minerals bill of the ministry, believed to be opposed by the mining lobby, seeks to give 26 per cent of profits from mining to locals and also to make them stakeholders. How will they be identified? How will the same be disbursed?
We are going to make annuity a part of the new law. You see we have deprived people of their land and so many things. They should get something for that. Annuity has been found attractive, and it appears to do justice. We want that kind of justice that works for local people. The law will have all these details, which are being worked out in near course of time. We're going to find out the areas where people are going to mine and find out what kind of agitation, cultivation etc is going on. There will be a system in place for everything. We are deeply interested in the welfare of the host population.

Why did the govt take so long to implement the 10% royalty rule replacing the fixed levy per tonne? How was the 10% level fixed?
We are going to change the law, but somewhere the matter is getting stuck. The law ministry has to also find time for this. We met 2-3 days back and we'll decide finally what all has to be a part of the new law. Till you have a new law, you can't accommodate all these archaic things. You must take the right things. The Mines and Minerals (Development and Regulation) Act, 1957 is an archaic law. There are certain things within that which are contradictory to each other. We want there should be a new law, new thinking, which is most important. There should be new thinking for the people, for the local host population and for their benefit.

The draft policy mentions that special care will be taken of the hosts and tribal population, and that project-affected people will be protected through certain packages. Please elaborate.
That has to be done. The packages have to be there. This annuity has been our suggestion. There are some people who may not like it so much but we are committed to this.

Is it the mining companies who don't like this?
Money has to be given by the mining companies. They cannot get everything free. Many of them don't like the aspects of annuity etc. but you're taking their property for good and you won't give them anything? The naxals have started talking about this. People have to be given justice, you can't keep everything to yourself and give them nothing.

Are we looking at a more people oriented mining policy?
Yes, exactly. It will be oriented towards development, towards common people on whose land they make their property. Mind that, it's on their land. Ultimately, they are not getting anything. No one is going to accept that. Now things are becoming different. even foreign countries like Canada and Australia are conscious about doing justice to the people. This is nature, you don't have a right to ravage the nature. Who will repair it? It's compulsory for the mining companies to repair nature. A sustainable development framework has been included in the new draft act; this was not there in the old act...

Are we redefining development as far as mining is concerned?
Yes, in the new act we have decided to do things in a committed way. Top priority is justice to the people.

In other countries, there are separate companies for prospecting and mining. In India, they are the same. Are we looking at a new way in which mining licenses will be given now?
No, licenses will be as they are. We want development to be seamless. Every time a mining company can't come and waste their money - the rights to the next stage must be automatic. There should be no second thoughts on that. It was because of this that foreign companies didn't want to come to India. They didn't accept the policy formulated in 2008. I happened to be the minister of state for mines then. I have also seen that people did come from different countries and said that we have got a promise from your country that justice will be given to the people.

There is no unified procedure currently to get environmental clearances for mining. Are we looking at a greater synchronisation between the environment and mines ministry in the future?
Yes, there will be greater synchronisation between the two. Once we correct things in the old act, which is very old, we'll start with new act. We have decided to go in for a new act instead of an amendment to the old one. There has to be new legislation.

Why did you feel the need for a new act?
Things must b understood in their context. Transparency is an important aspect. We want foreign companies to invest in India through foreign direct investment (FDI). If they are not convinced that we are transparent why should they come? Their message is clear, you change your policy or we don't come. FDI is big money, unless you have big money, there can't be new technology. And we want new technology. With new technology, we can bring improvement.

Land acquisition is the biggest issue today as far as mining is concerned. Tribals are opposing mining. This would scare away foreign investors. How is the ministry looking at these aspects?
So far the investors haven't shown any worry. This company from South Korea - Posco has been fighting back since 4-5 years. They still say they are hopeful and that it's important to take the local population into confidence. Land acquisition has been going on for 4-5 years now. If people are convinced this is going to benefit them then what the mining companies are doing in 4-5 years, they can finish in one year. These companies are paying off in informal/illegal ways to naxals etc, all this will come down. Day to day operations will come down. People will not want to disturb the mining activity. Posco believes that people are on our side but if you want to loot them, you don't want to give them annuity, they'll say what right you have to take what's ours? If local people sense your commitment, why should they go against the mining management?

How is the ministry looking at illegal mining?
Illegal mining is a great problem. It's very difficult to tackle. So far, all the mines belong to the states and that's the cause of everything. The actual rights go to the state. All approvals are given by state governments to mining companies. We have signed some MoUs with Nambia and they say they have the same problems of illegal mining -- people have been exploited etc. We are trying to find ways to deal with it.

What is your take on the recent mining scams -- Reddy brothers in Karnataka, Madhu Koda etc?
Karnataka has huge report of illegal mining. Whether we make a new law or not, illegality of mining has to be somehow tackled if you want peace and harmony in this society. That's the only civilised way.

What are some of the immediate steps? How does one prevent scams?
The Indian Bureau of Mines has undertaken inspections. In the new act, there will be provisions to contain illegal mining. In this, individuals and society as whole can file reports against illegal mining. As of now only state government representatives can file complaints. The new act will help us do that. State governments are lessers n lessees, one couldn't do much. Now we have had IBM going that extra step this time -- they have identified 120 illegal mines and suspended several.

Goa doesn't figure in that list, though there have been several cases of illegal mining?
Goa is a high profile state. In Orissa mining may be going on in 80 percent of the places, but it's not reported, so there's not much reaction. Goa has high density of population, high literacy, even a little problem comes into the media.
Illegal is when they extract where they don't have licenses or permissions. Goa mostly has pollution problems and pollution won't be reported in illegal mining. I'm proud of my ministry having got this new scheme to detect illegal mining -- remote sensing agency. People should know what we are doing. If people think everyone is indulging in illegal mining, they will lose faith in the system, in us.

What has been the mining industry's response to the new act?
It has been mixed. They are happy with the seamless transition from reconnaissance to prospecting to mining lease. Secondly, the transferability of tenement. They can sell their lease now not like presently where someone else is mining in someone else's name. Responsibility will be there. You can transfer your lease officially you're your home or property. Thirdly, we are establishing tribunals. If you filed an application before the state government and they are sitting on it for years, after two months only you can go to tribunal which will dispose off cases. The companies are slightly upset because no business person wants to commit to things like annuity, compensation, CSR etc.

What does the ministry mean by sustainable mining? How will it be implemented?
Sustainable development framework will have three components. One, social sustainability benefits to people directly. Two, environmental sustainability and three, sustainability in economic activity of mining. We want zero waste mining. Whatever you're taking from mother earth, you should not waste in the process. Put the latest technology/machinery and also plan in such a way that recovery is maximum, it shouldn't be that whatever minerals are there you finish them in 30 years and then look to import them. A system will be in place, the ministry has engaged a consultant where the world's best standards practices in sustainable development in mining, whatever is relevant to India will be taken. Sustainable development has to be part of the mining plan. Any kind of violation of social sustainability will lead to automatic cancellation of the lease. IBM has cancelled 40 licenses in last 6 months. State governments are not doing many things, so IBM has been directed to do this. As many as 18 mines in Bellary were cancelled a week back.

What are the figures for state and centre from mining?
Mines and minerals are the states' wealth, which get royalty from it. Earlier it was Rs 2,000 crore per year for all the states. We introduced the ad valorem royalty, in which it increased to Rs 4000 crores and now this will further increase. Goa saw an increase of nearly 300 crores and for a small state like that, they were happy. Earlier only mining companies benefited, now it must benefit everyone.

First Published: May 15, 2010 19:04 IST