Business Standard

Supreme Court’s stay will hurt sector, says mining industry experts

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The mining industry is likely to face disruption after the recent stay order by the Supreme Court on Tuesday to temporarily suspend the issuance of ex-post facto (after-the-fact or retrospective) environmental clearances (ECs). Industry experts anticipate a decrease in mineral production in the short term as existing mines will be unable to expand their operations without securing prior environmental clearances.

“Any stay will result in a delay in mining activities, potentially causing an economic slowdown. The purpose of the retrospective ECs primarily focuses on expansions, aiming to provide the mining licence holder with uninterrupted access to mining activities,” said B.K. Bhatia, Additional Secretary General, Federation of Indian Mineral Industries (FIMI).

The production timeline could also increase by several years because of the stay, experts say. “Getting prior ECs could mean a break of three months to a year depending on the size,” another expert said.

However, environmental experts highlight that conducting an EIA serves as a measure of mitigation. They emphasise that if mining activities have already caused damage, mitigation efforts might be ineffective or impossible.

“EIA is conducted prior to commencing mining activities, where involved agencies emphasise mitigation measures and monitor the mining process. However, if conducted after the mining activities have concluded, there exists no provision for remedying the damage incurred.,” Stalin D, director, Vanashakti NGO, which has filed the petition in the SC, told Business Standard.

A Mining License is granted to an entity only following a prior Environmental Impact Assessment (EIA) of the project, which encompasses details such as the mining area, technology specifications, and product mix. However, if the licence holder intends to increase production capacity, change mining technology, or modify the product mix, they must apply for a Term of Reference and Environmental Clearance (EC) as per the guidelines specified in the EIA Notification 2006.

On April 14, 2017, the Ministry of Environment, Forest and Climate Change (MoEFCC) implemented measures allowing retrospective ECs for licence holders who inadvertently breached the provisions outlined in the EIA Notification 2006. These breaches could occur due to construction, expansion, modernization, or alterations in the product mix.

The objective behind allowing retrospective ECs was to enable leaseholders to continue mining operations without interruptions. This flexibility permitted leaseholders to pursue mining activities while simultaneously applying for or acquiring the necessary licences subsequent to the mentioned activities.

Despite initially having a six-month duration, the special provisions specified in the 2017 notification were later extended until April 13, 2018. The Madras High Court stayed the post facto approval in the case of a mining project.

Subsequently, in response to numerous industry appeals requesting more time for mining companies, the government extended the deadline. Additionally, the MoEFCC introduced a Standard Operating Procedure (SOP) for identifying and addressing these violation cases on July 7, 2021.

In its office memorandum on January 28, 2022, the MoEFCC allowed the approval of ex-facto ECs, except for Tamil Nadu.

Stalin says that there is no data on how many ex-facto ECs have been granted since 2017.

“In cases where violations are discovered in the ex-post facto EC, there exists no provision for imprisonment; instead, the penalty imposed is a maximum fine of seven lakh rupees. This leniency in penalties has led to instances of mineral exploitation and disregard for norms,” Stalin said.

Though the detailed number of ex-facto ECs is calculated, the latest one was granted by the Centre grant of post facto Environmental Clearance for Khadia Opencast coal mining project for an increase in production capacity from 14 MTPA to 15 MTPA (an increase of 10 per cent w.r.t 10 MTPA) in land area of 1640 Ha by M/s Northern Coalfields Ltd. located in Uttar Pradesh and Madhya Pradesh) in its 3rd Expert Appraisal Committee (Coal Mining Sector) held during 16-17 November, 2023.

First Published: Jan 04 2024 | 12:24 AM IST

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