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Centre’s new policies violate the National Mineral Policy 2019: Goa Foundation

The group asked the state to act against the new policies that allow the Centre to sell off minerals, ignoring India’s federal structure, and usurp a state’s power to grant mining leases

Sabrangindia 01 Mar 2021

National Mineral Policy 2019

Environmental action group Goa Foundation (GF) objected to the Union Ministry of Mines’ “two steps backward” policies on publicly-owned minerals on February 22, 2021 stating that they ignored the National Mineral Policy 2019 and violated rights of future generations.

Recently, the central government proposed changes to the Mines and Minerals-Development and Regulation (MMDR) Act that enable the Centre to force states to sell minerals at prices set by the government, that are way below the market price. The group said that the proposed prices are vastly lower than the market price of the minerals – the royalty and the auction premia on auctioned merchant leases.

The action group felt that the Government of India intends to sell "family silver" at a massive discount. Accordingly, it responded to these consultations in a letter as can be viewed below:

GF Director Claude Alavres said that subsoil minerals are a shared inheritance under the Constitution, owned by state governments as people’s trustees and especially of future generations. Considering mining is the sale and disposal of this inheritance and the constitutional goal is zero loss in value during the financial transaction, he argued that any loss would violate the right to equality. Further, such a policy violates some miners over others.

“We urge state governments to urgently examine the consequences of these proposals on the federal structure of our union, the constitutionality of these proposals especially in light of their role as public trustees over the shared inheritance of mineral wealth on behalf of the people and future generations,” he said in a press release.

The group also pointed out that the changes were introduced without consulting the inter-ministerial body that confirms the sale of minerals, the time sale and the terms relating to it such as royalties, as stated under the National Mineral Policy 2019. Members asked how state governments would meet inter-generational equity if it lost control over such sales.

“These proposals violate the principle of subsidiarity and the federal structure of our Constitution… The ministry has repeatedly violated the pre-legislative consultation policy and the RTI Act in formulating and announcing these proposals. And we are shocked to hear that of the 12,149 comments the ministry received on the consultations on the draft MMDR amendments held in 2020, the ministry has considered only those suggestions 'which are committed for reforms in the sector.' Put simply, the ministry only listens to those who agree with its increasingly backward-looking reforms,” they said.

GF denounced the central government's alleged attempt to “usurp the power” of state governments – recognised by the Supreme Court - to grant mining leases. It stated that the sale consideration received in exchange for minerals – royalties and auction premia – are capital receipts rather than revenue, just like the proceeds from divestments. Thus, the import of raw materials and export of finished goods would strengthen the nation more than the export of minerals.

Members demanded a high security minerals supply chain to ensure no theft or loss of this wealth, including illegal mining. Yet, there is no blacklisting of illegal miners either under the Mineral Auction Rules or the Insolvency & Bankruptcy Code. Illegal mining is also not considered money laundering despite minerals’ association with the red corridor, they said.

“It is essential that fit & proper person tests and integrity due diligence be conducted on all participants in mining. In its absence, we have thieves managing the family silver, with obvious results,” they said.

Related:

Goa: Environmental groups call on political parties to protect generational resource inheritance

Goa Foundation reconsiders its stand on the mining auction announcement:  Victory at last?

Goa government considers auctioning 88 halted iron ore mining leases

New minerals policy sees natural resources as shared inheritance

Centre’s new policies violate the National Mineral Policy 2019: Goa Foundation

The group asked the state to act against the new policies that allow the Centre to sell off minerals, ignoring India’s federal structure, and usurp a state’s power to grant mining leases

National Mineral Policy 2019

Environmental action group Goa Foundation (GF) objected to the Union Ministry of Mines’ “two steps backward” policies on publicly-owned minerals on February 22, 2021 stating that they ignored the National Mineral Policy 2019 and violated rights of future generations.

Recently, the central government proposed changes to the Mines and Minerals-Development and Regulation (MMDR) Act that enable the Centre to force states to sell minerals at prices set by the government, that are way below the market price. The group said that the proposed prices are vastly lower than the market price of the minerals – the royalty and the auction premia on auctioned merchant leases.

The action group felt that the Government of India intends to sell "family silver" at a massive discount. Accordingly, it responded to these consultations in a letter as can be viewed below:

GF Director Claude Alavres said that subsoil minerals are a shared inheritance under the Constitution, owned by state governments as people’s trustees and especially of future generations. Considering mining is the sale and disposal of this inheritance and the constitutional goal is zero loss in value during the financial transaction, he argued that any loss would violate the right to equality. Further, such a policy violates some miners over others.

“We urge state governments to urgently examine the consequences of these proposals on the federal structure of our union, the constitutionality of these proposals especially in light of their role as public trustees over the shared inheritance of mineral wealth on behalf of the people and future generations,” he said in a press release.

The group also pointed out that the changes were introduced without consulting the inter-ministerial body that confirms the sale of minerals, the time sale and the terms relating to it such as royalties, as stated under the National Mineral Policy 2019. Members asked how state governments would meet inter-generational equity if it lost control over such sales.

“These proposals violate the principle of subsidiarity and the federal structure of our Constitution… The ministry has repeatedly violated the pre-legislative consultation policy and the RTI Act in formulating and announcing these proposals. And we are shocked to hear that of the 12,149 comments the ministry received on the consultations on the draft MMDR amendments held in 2020, the ministry has considered only those suggestions 'which are committed for reforms in the sector.' Put simply, the ministry only listens to those who agree with its increasingly backward-looking reforms,” they said.

GF denounced the central government's alleged attempt to “usurp the power” of state governments – recognised by the Supreme Court - to grant mining leases. It stated that the sale consideration received in exchange for minerals – royalties and auction premia – are capital receipts rather than revenue, just like the proceeds from divestments. Thus, the import of raw materials and export of finished goods would strengthen the nation more than the export of minerals.

Members demanded a high security minerals supply chain to ensure no theft or loss of this wealth, including illegal mining. Yet, there is no blacklisting of illegal miners either under the Mineral Auction Rules or the Insolvency & Bankruptcy Code. Illegal mining is also not considered money laundering despite minerals’ association with the red corridor, they said.

“It is essential that fit & proper person tests and integrity due diligence be conducted on all participants in mining. In its absence, we have thieves managing the family silver, with obvious results,” they said.

Related:

Goa: Environmental groups call on political parties to protect generational resource inheritance

Goa Foundation reconsiders its stand on the mining auction announcement:  Victory at last?

Goa government considers auctioning 88 halted iron ore mining leases

New minerals policy sees natural resources as shared inheritance

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