A recent mining ministry report recognises logistics as one of the several problems clogging the sector. It's yet another wake up call for the sector.
It's raining mining reports out of the Pandora's Box that Justice Santosh Hegde opened.The MB Shah Report (see table below for salient features) concurs with Hedge's opinion that ore export should be banned altogether to curb illegal mining. Among the six recommendations is a blanket ban on iron and manganese ore export.On the other hand, though, media reports say the government is unlikely to do so.
While illegality arises from encroachment of land beyond allotted mine land and from underreporting volumes and profits, logistics has often been acknowledged as the main point of assessment of illegality, mainly by measuring at various points during transportation of ore.Suggested methods of such measurement have varied, including the Integrated Lease Management System developed by (n)Code (the information technology division of the Gujarat Narmada Valley Fertilizers Company), designed to help the government monitor and check rampant illegal mining. By integrating the weighbridge with the softÂware, every outbound truck is weighed at the mine entrÂance and the data is directly transmitted to the government within a matter of a few seconds.
If the proposal to canalise-going through an agency rather than directly-comes into effect, ore exporters can only execute these contracts through a government owned company such as MMTC, NMDC or State Trading Corporation.The hope is that the involvement of state agencies will help curb export of illegal ore to China, whose huge increments in demand had exacerbated illegal mining in the last two years until the Hegde report. Out of 220 mt of iron ore reported, 120 mt is exported, but it is understandably much higher, given that liberal estimates say as much as 30 percent is illegally mined.
Inefficient logistics in the mineral sector has been resulting in revenue losses that the mines ministry is pegging at Rs 9,000 crore. A recent government report, Unlocking the Potential of the Indian Minerals Sector, blames rail, port and road connectivity and bottlenecks therein for this bleeding. Adding to the pressure of efficiency issues is the recent target announcement to add $210 billion to the country's gross domestic product (GDP) from the mining and minerals sector by 2025, at a growth of 12 percent a year.
Whether export ban will put a stop to illegal mining is a logical speculation at best. The fallouts of a declined economic growth from an already faltering sector should also cause concern among policymakers. On the other hand, a temporary export ban will aid the government to get its act together to plug illegal mining through more foolproof weighing, monitoring and other methods.
The mining ministry's report plans developing infraÂstructure capacity to support the sector, requiring:
Collaboration with railways, ports and surface transport ministry to pursue the top 50 infrastructure projects (railway sidings, trunk lines, doubling of track, use of better equipment) for the mining sector.
Use of local development funds (including District Mineral Fund) for local socio-economic infrastructure creation, management and maintenance.
Liaison with department of shipping to develop key coastal corridors and expand capacity of major ports.
It is important to note that the report recognises better and clearer communication among the seven stakeholders of mining local community, public representatives (NGOs, MLA, panchayats), central government bodies (Planning Commission, PMO, etc.), related ministries (MOEF, railways, etc.), state governments, mining sector ecosystem (mining and associated legal/financial companies) and the international community. As the activity heavily involves state and local governments in creating the logistics infrastructure, it will be imperative for the stakeholders to be on the same page while dealing with mining's complex, nightmarish problems.
-Shashidhar Nanjundaiah
SHAH COMMISSION'S RECOMMENDATIONS
Ban export of iron ore and manganese ore
Amend Section 24 of MMDR Act, 1957 (deals with govt's power of entry and inspection of a mine)
Amend Rule 26 & 27 of MCR 1960 restricting persons convicted for illegal mining from lease renewals and cancellation of lease
Amend Rule 24 A of MCR pertaining to deemed extension of leases
Amend field circulars issued by IBM for regulation of boundary pillars of leases
State governments should improve regulation
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