Vidarbha region has rich and extensive deposits of minerals owned by large, medium, and small industries. However, the mining industry is heavily regulated, and it is cumbersome for the MSMEs to comply with and obtain all clearances required for starting and sustaining mining operations. One of the major focus areas of the Vidarbha Economic Development Council, from its inception, has been dealing with mining-related problems.
For this, VED came up with two conferences, MINCON 2019 and MINCON 2022. From these emerged problems which VED Council has been taking up persistently with the mining ministry and authorities. From the past experiences of the mining fraternity, it has also been noted that there is hardly any delegation from the Central and State Level Authorities to the local offices such as DGM – Directorate of Geology & Mining, Regional Officer – Indian Bureau of Mines, District Collector etc. We therefore feel that State Government intervention is required for seeking relief to the mining sector in particular.
Rajkumar Agrawal, Chairman, Mines and Minerals Committee, VED Council, says, “We are trying to analyse the persisting issues along with their impact and have given our recommendations.”
Among the issues are the pending cases of minor minerals are that small industries are unable to sustain long waiting periods awaiting resolution. There’s loss of revenue to the State due to non-operational mines.
The recommendations are to form a committee which convenes every 15 days at the DGM Office and sets time-lines for resolution of these issues – both for prospective mine-owners and the Government. All pending issues should be resolved or cancelled as appropriate in a definite time frame of 6 months.
There should be delegation of Authority to the DGM and District Collectorate. All applications in respect of mining leases have to be presented at the Mantralaya (Sate Government) for approval or resolution, which is time-consuming and expensive as well. The above process delays the start-up of mines.
The recommendations are that for small mines (area can be decided) and identified low value minor minerals, approval and resolution processes can be delegated to speed up the approvals and sanctions. For land acquisition matters, and negotiations with owners of tribal land for small and medium size areas (area can be decided), can be delegated to Collectorate levels.
A lot of time is consumed in obtaining various compliances in respect of environment, water, safety etc. Small and medium industries who cannot afford to have in-house staff, find it difficult to manage applications as they solely depend on Consultants and service-providers. This long processing time delays the process.
The recommendations are that there’s need to facilitate a single window / platform for application as basic organization details such as address, PAN, GST, capacity and manpower details are common for all applications. In case of completed applications on the portal, provide a conditional approval for further process by obtaining declarations from owners that they would comply with process notes and queries in the given time-frame.
For obtaining Forest / wildlife habitat area clearances and NOCs the process is extremely time-consuming which delays the completion of formalities for applying for mining leases or land transfer dealings.
The recommendations are that the State Government should obtain in-principal approval of the Forest Authorities before offering ‘identified’ blocks for Public auction. Specific clearances or compliances may be carried out later by prospective mine-owners who have been awarded the mines in auctions. Such specific clearances can be carried out by mine-owners in a self-declared time period and further processing and approvals should not be dependent on such clearances once an in-principle approval is on the record. A nominal cost of such in-principal approvals obtained by the State Government can be recovered from prospective mine-owners during the auction award process.
There should be differentiation of applicability of statutes for small, medium, and large sector mines and also based on the mineral involved. Small and medium mine-owners cannot afford the cost of complying with heavy and lengthy regulations. Such delays in the approval process render the units are unviable so that the mine-owners abandon the process due to frustration.
The recommendations are that statutory reforms should be initiated to make their applicability as per the level of mining operations (small, medium, large) and the type of mineral involved. The ‘One size fits all’ system should not be applied as it renders small units unviable. The cascading effect of this is local unemployment, mineral resource being unutilized, and loss of revenue to exchequer.
Availability of fuel – Coal and Diesel – to Mineral-processing industries is not available in a seamless manner. The quantity is also not available to the extent required. Due to dependence on the local market, quality and quantity of fuel is impacted, which is detrimental in controlling the operational costs.
The recommendation is that the Government should support in the form of policy enactment where availability of Coal and fuel is allocated to the Mineral processing industry on priority. Also, the Coal allocation process should be simplified, based on important and minimal review of key industry criteria.
Refund of royalty paid by mineral processing industries as Royalty is paid by all processing industries when purchasing minerals from Mines or the open market as the Royalty value is factored into the mineral selling price. Also, the Processing units are incurring manufacturing, administrative and selling expenses over and above the mineral cost. On the sale of these processed minerals, processing units are paying GST on the mineral value plus value-added costs.
The recommendations are that Royalty refund should be available to all processing plants in the State, irrespective of applicability under any incentive scheme. This refund to processing units would incentivise the industry and enhance their bottom lines apart from improvising their cash flow. Increased profitability would enhance the sustainability of the unit and also contribute to the Government treasury in the form of direct and indirect taxes.
RK Agrawal further added, “These recommendations taken on board by the Government, would go a long way in improvising the health of the current mining industry, especially in the Vidarbha region. Industry would be encouraged to set up new units for processing minerals near the Mines areas. This would promote overall development of backward areas, promote local employment, set up ancillary and support-service start-ups by the local communities. Increased productivity would fuel overall industrial development, leading to development in infrastructure and added revenue to the Government treasury in the form of taxes.