National Mineral Policy 2006 - Department of Mines

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Chapter 3Forest Conservation and Environment Protection(Term of Reference no. 3)To review the procedures for according clearance to mineral exploration and mining projectsunder the Forest (Conservation) Act, 1980 and the Environment (Protection) Act, 1986 andsuggest ways for speeding them upNEED FOR SUSTAINABLE DEVELOPMENT3.1 Exploration, development, production, and disposal of minerals affect theenvironment and ecology of the mined area. Mining has to be done in a way that causes leastdamage to natural resources such as air, water, soil, and biomass. The two statutes mentionedin the TOR, viz. FCA and EPA, impose certain restrictions on prospective miners. Clearancesare required under these statutes to ensure that the mining operations of the prospectiveminers are carried out in such a way as to conserve forests and protect the environment. Thedelays that occur in the grant of these clearances mainly relate to the assessment of measuresdesigned and proposed to be undertaken by prospective miners to achieve these ends. Beforedealing with the adequacy and efficacy of the assessment methodology it would beworthwhile to review the best practices internationally in the area of environmentmanagement. If conditions in India are aligned to these best practices the delays can beeliminated.3.2 Internationally, there are two separate but linked developments that need to beexamined. First, the International Institute of Environment Development and the WorldBusiness Council for Sustainable Development jointly completed a study known as the‘Mining, Minerals and Sustainable Development’ (MMSD) Project and published its resultsin 2002 in the report ‘Breaking New Ground’. 1 This report has set the benchmark for allnatural capital related issues connected with mining anywhere in the world. Secondly, theInternational Council of Mining and Metals (ICMM) in dialogue with the World1 ‘Breaking New Ground: Mining, Minerals and Sustainable Development’, The Report of the MMSD Project,Earthscan Publications Ltd, London and Sterling VA .66
Conservation Union (International Union for the Conservation of Nature and NaturalResources) (IUCN) has developed a Sustainable Development Framework (SDF) drawingupon the landmark MMSD Report. The framework comprises ‘ten principles’ of mining, aGlobal Reporting Initiative (GRI) to enable verification of the implementation thoseprinciples by miners across the world, and good practice guidelines in the form of a Miningand Metals Sector Supplement containing relevant indicators that will allow miningcompanies to track their performance against the ten principles and the GRI guidelines.3.3 The MMSD Report recognised that one of the greatest challenges facing the worldtoday is integrating economic activity with environmental integrity, social concerns, andeffective governance systems. The goal of that integration is sustainable development. Thereport stipulates that in the context of the mineral sector the goal is to maximise the miningsector’s contribution to the well-being of the current generation and at the same time toensure an equitable distribution of its costs and benefits without reducing the potential forfuture generations to meet their own needs. This is based on the Brundtland Commission’sdefinition of sustainable development. 2 The report states: ‘i[I]n the mining and metals sector,this means that investments should be financially profitable, technically appropriate,environmentally sound and socially responsible’. Thus, while the role of mineral wealth inmaximising human well-being should be acknowledged it is also important to acknowledgethat wealth should be managed in a way that protects the environment and other social andcultural values. The MMSD Report identified key challenges facing the mineral sector,representing the most pressing issues that need to be addressed. Of these, the challengesconcerning forests and environment are dealt with below.CONTROL, USE, AND MANAGEMENT OF LAND3.4 Mineral development is one of a number of competing land uses. Due to lack ofplanning and other frameworks to balance and manage possible uses there are problems anddisagreements in the matter of control, use, and management of land. Exploration and miningpose significant challenges in terms of land access and management. The most appropriateuse of land is best decided within an integrated land planning framework that balancescompeting interests such as between national and local levels or between mining and2 In its report published in 1987, the World Commission on Environment and Development (BrundtlandCommission) defined sustainable development as ‘development that meets the needs of the present withoutcompromising the ability of future generations to meet their own needs’.67
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National Mineral PolicyReport of th
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ContentsAcronyms...................
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Annexure 5: Using the GRI Guideline
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GDP gross domestic productGIS Geogr
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UNFCUSVATWCUUnited Nations Framewor
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Introduction1. The Government of In
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issues relate to fund raising by pr
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termination of MLs, lowering of cei
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• In the case of large mining ope
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investment. The work done by GSI co
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mainly for minerals of base metals
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1.21 This situation has changed dra
Page 26 and 27: absent. A study by the United Natio
Page 28 and 29: example, a mining major may outsour
Page 30 and 31: would otherwise remain unexploited
Page 32 and 33: the policy environment must continu
Page 34 and 35: ‘A thrust is to be given to explo
Page 36 and 37: In reviewing the MMDR Act, it is ne
Page 38 and 39: permissible activities in order to
Page 40 and 41: (i)(ii)(iii)(iv)The current two-tie
Page 42 and 43: per plan should be significantly hi
Page 44 and 45: Duration of Concessions1.48 In the
Page 46 and 47: 10,000 sq. km in a state. This has
Page 48 and 49: (ii)(iii)(iv)The maximum total area
Page 50 and 51: e obviated if the lease deed is exh
Page 52 and 53: elinquishment of areas by the lesse
Page 54 and 55: to give priority to the prior appli
Page 56 and 57: (v)(vi)(vii)Rules should be prescri
Page 58 and 59: esponsible for all rights, liabilit
Page 60 and 61: ut also the revenue generated from
Page 62 and 63: government at the Secretariat. A le
Page 64 and 65: Secretary. If the Directorate is in
Page 66 and 67: (i) All applications for mineral co
Page 68 and 69: application. A similar website shou
Page 70 and 71: concerned State Government (or othe
Page 72 and 73: Further, Rule 7D of the MCR specifi
Page 74 and 75: mission mode through, inter alia, t
Page 78 and 79: conservation. There are trade-offs
Page 80 and 81: ICMM AND SDF3.8 The ICMM membership
Page 82 and 83: higher level. The basic approach is
Page 84 and 85: (i) To minimize displacement and to
Page 86 and 87: affected PAPs in the mining operati
Page 88 and 89: that a well-regulated and responsib
Page 90 and 91: (iii)Notwithstanding the above, sur
Page 92 and 93: egard, all ‘forest’ land must b
Page 94 and 95: Figure 3.1: Procedure for Processin
Page 96 and 97: should be authorised to grant or re
Page 98 and 99: formulation and appraisal of the EI
Page 100 and 101: 3.41 Recognising the need to make t
Page 102 and 103: Figure 3.3: Public Hearing/NOC from
Page 104 and 105: Chapter 4Infrastructure Needs and F
Page 106 and 107: 4.5 Logistics is the key to access
Page 108 and 109: Table 4.1: Mineral Production in In
Page 110 and 111: necessary, therefore, that in infra
Page 112 and 113: to the ports of Haldia and Paradip
Page 114 and 115: Connectivity of Major Ports, brough
Page 116 and 117: (iv)(v)(vi)(vii)At Visakhapatnam Po
Page 118 and 119: was of the opinion that while the m
Page 120 and 121: such an arrangement, the Ministry o
Page 122 and 123: developed, controlled, and run by s
Page 124 and 125: subject to overt and covert restric
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consideration to the end use of the
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(iii)parameters laid down in existi
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Chapter 6Augmenting State Revenues(
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the value addition question conside
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In a system of ad valorem rates of
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must provide revenues sufficient to
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Box 6.1: Methods of Valuation of Ro
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Another point to be borne in mind b
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ailable, cognisable criminal offenc
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e worked out. This should be string
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7.3 Considering the high-risk natur
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Table 7.2: Minimum Listing Requirem
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(ii)(iii)only. Such funds have not
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addition, the minimum post-issue fa
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and hence this ore should be conser
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miners distort the market for their
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7.22 The current law does not make
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is mostly of low grade magnetite. H
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Most magnetite findings are entirel
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in UK 206 kg, and in China it grew
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metres. The use of down hole drill
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7.42 Despite the fact that SME mini
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also be a consideration. However, t
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price, reduce profitability, and pu
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IMPACT ON DOMESTIC IRON ORE PRICES
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7.58 Export of iron ore fines on a
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POLICY ON BEACH SAND MINERALS7.64 B
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not contain more than 0.1 per cent
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7.73 On 18 January 2006, the DAE no
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with the Centre is mainly to ensure
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India enterprise) reported that the
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chloride process pigment technology
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are disposed of in the mined-out ar
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directed to ensure that the AERB/AM
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would have to be carefully drafted
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‘In coordination with the Geologi
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Exploration Licences• The current
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• The fees should be significantl
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surveys have been undertaken, the P
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automatic until the exhaustion of t
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y stating in the MMDR Act that a pr
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departmental representative for sec
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therefore (under Rule 63A), pass su
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• Section 12(1) of the MMDR Act s
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o The lessee should not be asked to
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again and the State Mines Departmen
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• As in the past, no environmenta
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oad and rail, and lack of long-term
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government to the applicants who ar
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next three-year period as well. In
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• Rates of dead rent should be ra
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measure to provide a level playing
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• In respect of three titanium be
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No-I&M-25(3)/2005Government of Indi
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No-I&M-25(3)/2005Planning Commissio
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‘Efforts would also be made to gr
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ecommending amendments to the Act a
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etained as a Prescribed Substance u
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OthersShri Arvind VarmaEx-Secretary
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16. Reserve Bank of India17. M/s Ji
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the RP holders in areas beyond 25 s
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Appendix ERecommendations of the Ex
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(1) Provide proximate and strategic
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technology to enter the Indian stee
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Cross-country Comparison of Mining
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Appendix F (cont.)Country Mining La
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Cross-country Comparison of Mining
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Appendix G (cont.)Country Mining le
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CountryAppendix H (Cont.)Environmen
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AustraliaIndonesia 9 4 Not specifie
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Annexure 1 (cont.)Geologicalenviron
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operations are undertaken over a fa
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B. After Rule 54 of the Mineral Con
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the Central Government to entertain
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applications, could exercise the ju
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We most humbly request that the abo
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Annexure 4The 2002Sustainability Re
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While unique in its coverage and pr
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• facilitate comparability• add
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AssuranceJust as investors look to
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The Guidelines are structured in fi
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There are many aspects relevant for
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- Issues in which community partici
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Annexure 7Royalty Accruals on Miner
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Sl.No.MineralAnnexure 8 (cont.)2003
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Annexure 91 THE SECOND SCHEDULE 1(S
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(v) Group V Coals:(a) Non-Coking Co
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23. Iron Ore:(i) Lumps:(a) with 65
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45. Tin Five per cent of London Met
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International Comparison of Royalty
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Production, Consumption, Exports, a
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National Mineral Policy 2006 - Department of Mines

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