A deeper problem

Semi Column

The ban on mining in several states, along with the clampdown on minerals across the country, has not followed a logical sequence or a plan. Several agencies with different perspectives got themselves involved channelling their efforts through either the courts or the government.

As a result, while iron ore mines of only public sector companies are open for operation in Karnataka, in Goa any steel company with captive mines can operate. In Orissa the rules are still being rewritten. In coal or in bauxite, the rules are almost mine specific in some cases.

While these have impacted production of coal and iron ore (measured by steel output) as per latest core sector data 6.7 and 3.4 per cent growth rate in this fiscal, there is also a collateral damage.

The mining of minor minerals including sand, stone, soil and granite have got sucked in the anti-mining tirade. Their extraction, largely dispersed involving small-scale players, local-level politics and some corruption has been hit by a Supreme Court order of February 27, 2012. The order stipulates that leases of minor minerals including their renewal for an area even of less than five hectares can now be granted by the states only after getting an environmental clearance from the union ministry of environment and forests.

The value of minor minerals extracted amounts to just a fraction of the total turnover of major minerals such as coal and iron ore. Production of minor minerals in different states was valued at Rs 18,734 crore in 2009-10, with Andhra Pradesh accounting for nearly 54 per cent of this production, according to a May 2012 research study sponsored by Planning Commission.

In terms of utility though, minor minerals are much more important than their value of output suggests. After the court-ordered clampdown, the construction business and the highways sector have taken the worst hit. At least 70 highway projects are estimated to be stuck on account of the delays in the clearances from the environment ministry for mining of common soil for use in the basic foundation work. In northern states, the ban on quarrying earth has spiked brick prices, creating repercussions for the construction business. While the highways sector has now got a partial relief from the environment ministry, other affected players in other sectors,now expect some relief in clearances.

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