National Mineral Policy 2006 - Department of Mines

would otherwise remain unexploited could be given, wherever possible, on priority basis as acluster of mines to individual miners/ end users who are otherwise qualified. This wouldreduce the phenomenon of non-operating leases by enabling investors to reap the benefits ofscale economies. In the case of iron ore, for instance, as against 600 MLs actually issued,only 240 leases are currently operational, with most of the small mines being operated eitherintermittently or not at all.1.34 Para 7.13 of the NMP deals extensively with the issue of environment, forests, and theneed to restore ecological balance. This aspect of mining development is now an area ofprime importance. With the Samatha judgment 5 of the Hon’ble Supreme Court, the right tocompensation of local populations, not only in cash through usual relief and rehabilitation(R&R) packages but also to a fuller life, now requires to be written into the law. While theNMP speaks extensively of environment-related issues the issue of Scheduled Tribes (ST) ismentioned only in passing in paragraph 1.3. The issue of compensation for local tribalpopulations as a primary charge on the minerals extracted from their land needs to be builtinto the policy and given primacy along with the issues of deforestation, pollution, and otherdisturbances caused in the ecology by mining activity. Detailed recommendations in respectof environment, forests, and local populations have been made by the Committee in Chapter3 of this Report.1.35 Foreign trade and augmenting of state revenues are dealt with separately in this report.However, as regards exports, broadly it may be said that financing of exploration projectscarries with it the element of risk and returns are not always guaranteed. A limitation onexports would also amount to restricting the market for Indian ores, thereby depriving theminer of the best international price for his product. This would have consequences in termsof profitability of mining operations and, therefore, on investment decisions. The miningindustry would be doubly handicapped in that not only would normal investment beadversely affected, so would also risk investment in exploration, which is vital forestablishing new and recoverable finds. A selective ban or limitation on exports would be adirect disincentive to FDI in the mining sector. The policy should stress on linkages withglobal demand and global supply rather than domestic industry. Local industry can gain from5 Supreme Court Judgment dated 11 July 1997, in Civil Appeal (CA) nos. 4601–02 of 1997 arising out ofSpecial Leave Petition (SLP) nos. 17080–81, Samatha vs. State of Andhra Pradesh & others.20