ISSUE III : Statutory permits required to start-up mining activities

Introduction

Minerals, a non-renewable natural resource are a vital raw material to a number of industries. As these resources are limited and non-renewable, the mining activity requires a lot of licenses and adherence to stringent compliances. The present bulletin discusses about the various permits or consents required to undertake mining activities, the responsible authorities from whom the permits can be acquired and the requirements for obtaining these consents/permits.

The following permits in the given order have to be obtained in order to carry on mining activities:

  1. Mining Lease (“ML”) from the state government under the Mines & Minerals (Development & Regulation) Act, 1957 (“Mines Act”) and Mineral Concession Rules, 1960 (“Concession Rules”).
  2. Environment Clearance from the Ministry of Environment and Forests (“MoEF”).
  3. Combined consent under the Water (Prevention and Control of Pollution) Act, 1974 (“Water Act”) and Air (Prevention and Control of Pollution) Act, 1981 (“Air Act”) and authorization under Hazardous Waste (Management and Handling) Rules, 2003 (“Hazardous Wastes Rules”) from the State Pollution Control Board (SPCB).

1. Mining Lease

1.1 Eligibility

The state government can grant ML to any Indian national or a company registered under Companies Act, 1956 for all the minerals within its territory on “first come first serve” basis. Also, there is no restriction on foreign equity holding in mining sector companies registered in India. However, for certain minerals like coal, atomic and major minerals like asbestos, bauxite, chalk, etc., ML has to be obtained from the central government. The state government evaluates the applications on merit and on objective criteria like experience, financial resources, level of proposed investment etc. and grants ML accordingly. Once the area for which the ML is to be granted is decided by the state government, the applicant is required to submit a mining plan within 6 months to the central government for approval of the ML.

1.2 Types of leases

State government can approve 3 kinds of mineral concessions i.e. Reconnaissance Permit, Prospecting License and ML. Reconnaissance Permit is granted for preliminary prospecting of a mineral through regional, aerial, geophysical or geochemical surveys and geological mapping. It is granted for 3 years and for a maximum area of 5,000 square

kilometers which is relinquished subsequently. Prospecting License is also granted for 3 years for undertaking operations for the purpose of exploring, locating or proving mineral deposit. ML is granted for undertaking operations for mining of any mineral for a maximum area of 10 square kilometers. Duration of ML may vary from 20-30 years. Reconnaissance permit holder has preferential right for grant of Prospecting License.

1.3 Process

The ML application form has to be submitted to the officer authorized by the state government with the prescribed fee (a sum of INR 500 and INR 1,000 being the fees in respect of this application and preliminary expenses respectively). The form includes details like the description of the area, period and minerals for the prospective project. Mining dues clearance certificate1 and a topographical map obtainable from the Office of Survey of India, have to be provided for reference with the form. Where the area covers forest land, forest maps and status of forest (reserved or protected) are also required to be submitted with the form. Time limits are prescribed for conveying decision for mineral concessions such as six months for RP, nine months for PL and twelve months for ML.

2. EC under the Environmental Impact Assessment Notification, 2006

2.1 The purpose of an Environmental Impact Assessment (“EIA”) is to identify, examine, assess and evaluate the impacts of a proposed project on the environment and formulate remedial action plans to minimize adverse impact on the environment. EIA notification makes prior Environmental Clearance mandatory for development activities.

2.2 Types of environmental clearance:

An application for clearance has to be made to the concerned authority depending on the category of project. Mining of minerals with ML area over 50 hectares and asbestos mining irrespective of area fall under Category “A” whereas Category “B” includes mining of minerals with ML area less than 50 hectares. MoEF has to be approached for Category “A” and the State Environment Impact Assessment Authority (“SEIAA”) for Category “B” projects. Clearances are given by MoEF and SEIAA on recommendations of the Expert Appraisal Committee (“EAC”) and State level Expert Appraisal Committee (“SEAC”) respectively. The form requires information like ML area, production capacity for mineral production, area for mineral exploration and other details such as construction, operation or decommissioning of the project involving actions, which will cause physical changes in the locality (topography, land use, changes in water bodies, etc.), use of natural resources and harmful substances.

2.3 Process

EIA clearance applications are processed in four stages- screening, scoping, public consultation and appraisal. Screening involves scrutiny by SEAC of Category “B” projects only. Scoping refers to the process of determination of Terms of Reference2 by EAC and SEAC for category “A” and category “B1” projects respectively. Public consultation is conducted by SPCB or Union Territory Control Board. The final stage of appraisal involves the detailed scrutiny of the plan and recommendations are made to the concerned authority for the grant or rejection of the EC. The four stages have to be completed within 210 days.

3. Environmental Consent by SPCB

3.1 Types of environmental consents/permits

In order to start any mining project, consent has to be obtained from the SPCB under three statutes i.e. the Water and Air Act and the Hazardous Wastes Rules. These laws are implemented by the Central Pollution Control Board, along with respective SPCBs. During mining activities, it is necessary to keep a check on this as the quantum and nature of discharge is regulated under various environment regulations and mining projects need to seek prior approval from the SPCB to remain compliant. A common application for combined consent to establish under the Air Act and Water Act and another application for obtaining authorization under hazardous waste have to be submitted at the respective sub- regional officer of the SPCB under whose jurisdiction the applicant’s activity falls.

3.2 Consent Process

The forms have to be accompanied by the consent fees in the form of a demand draft in favor of SPCB. The consent fee3 is prescribed by the state government depending on capital investment of industry (including land, building, and machinery without depreciation). The mining projects have to pay INR.0.40 per ton of mineral per annum in addition to the payment as per capital cost of the mining project, as consent fee. The accompaniments with the form include site plan, detailed layout plan of the factory, manufacturing process, details of air pollution control devices, ambient air quality report and SSI certificate. Once the industry or process plant is established along the required pollution control systems, the applicant is required to obtain consent to operate the unit. This consent is given for a particular period, which needs to be renewed regularly. For consent to operate along with the other accompaniments copies of previous consent and EC have to be submitted.

3.3 Other permits

Mining operations are hazardous in nature. HWM regulates the generation, collection, treatment, import, storage, and handling of hazardous waste generated in an industrial activity connected with hazardous chemicals and isolated storage facilities. Under the HWM, the mining project should have the necessary authorization from SPCB for disposal of the hazardous waste generated in its facility in Form 1. Disposal of hazardous waste is done by a waste management vendor which is permitted by SPCB to treat and dispose hazardous wastes. Pursuant to generating hazardous waste, the mining industry has to file necessary forms and returns with the SPCB. Failure to maintain records or file annual returns does not have a specific penalty, but in due course this lapse in compliance can lead to the cancellation of the authorization from SPCB under HWM and also create unnecessary obstruction during renewal of its existing authorization.

4. Special considerations

All mineral concessions are granted by the state government keeping in mind the environmental factors such as pollution, rehabilitation of land and displaced people, potential disturbance to the ecology and costs of restoring the landscape. Selection of ML area is very critical for any mining activity as seen in the case of J. Ravindranath J. Suryamarayama v. State of Maharashtra4 where mining activities in a reserved forest area without permit was held to be a criminal offence. Moreover, the Bombay High Court has held that a person/company can be restrained from carrying on mining activities if the EC is not renewed on time.5 The Ministry has reviewed extensively the issue of illegal mining with the State Governments and various decisions were taken to prevent illegal mining, transportation and storage of minerals. Once the process of economic extraction of a mine is complete, the mine has to be closed, such that the ecology is balanced and also take into account the socio-economic aspects of such closure such as loss of employment and dislocation of laborers.

Conclusion

Mining of minerals is very important for the economy of the country. The government has to also keep the environmental and safety concerns in mind while approving mining activity. Minerals continue to be an important source of foreign direct investment. Thus, the mining projects should have an impeccable record of environmental safety and proper permits to attract better foreign investment.

Authored by:
Priyanka Das

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