The Supreme Court on Monday lifted a ban on iron-ore mining subjected to a cap of 20 million tonne a year but questions have been raised over whether companies would be able to start mining work considering most licences have expired long back.
Companies such as Sesa-Sterlite , which operate in Goa, will have to apply for fresh licences, RK Sharma, secretary general of Federation of Indian Mineral Industries, told CNBC-TV18's Latha Venkatesh.
Also read: SC allows iron ore mining in Goa with upper limit of 20mt
"Most companies in India, not just Goa, are operating under the deemed extension clauses," he said. "But with respect to expiration of mining leases in the whole country in 2007, the concern exists that what will happen after the first renewal expires."
He added state governments take a lot of time in renewing mining leases, adding that he foresees mining in Goa to restart in one-two years, if the "state government was very proactive".
The Supreme Court decision has decided on a 20 million tonne cap on an ad-hoc basis till a committee decides on a figure in six months, Prasanna Acharya, Director of Mines and Geology, Government of Goa said.
Sharma, however, said that the mining restart may not benefit domestic steel companies as companies may prefer to export.
Below is the edited transcript of the interview with CNBC-TV18.
Q: We understand that the deemed mining licenses have lapsed as of November 2007 so now even Sesa Sterlite has to apply for them afresh as have to other companies in Goa?
Sharma: Yes and let me extent this argument a little beyond Goa. All over the country almost all the state governments have not renewed the mining leases within time. In case of Orissa, Jharkhand, Karnataka, other places, the mining leases are continuing under deemed clause for the last 20-30 years. Even the captive mines of Steel Authority of India (SAIL) and Tatas are under this category.
Of course, we welcome the judgement of SC that they have allowed mining in Goa. But with respect to the mining lease lapsing in November 2007, this applies to the whole country. A very serious concern has risen in the mind of the mining industry, what will happen after the first renewal has expired and the lease has not been renewed? State governments just sit and don't take any appropriate action.
Now a mining lease with which I have associated for the last 50 years suddenly I get disassociated with that and when I apply for a new mining lease whether the state government will grant a lease to me or to other people because at the state level there are various other considerations and back door working.
So I am not sure whether I will get the mining lease and this is more so in the case of people who have got captive mining leases that my steel plant and my downstream industries working based on the basis of my mining lease. If the state government has not granted me the renewal after first renewal I will have to apply for fresh one, my whole industry is in suspension.
This is a big concern for the entire mining industry in Goa. I personally feel there should be some sort of direction from the central government or the SC. When the mining leases after the first lease expires apply for the second renewal then the parties who were associated with the mining lease till the end of first renewal should be granted the second renewal.
Q: So our understanding is right that as of now there are no mining leases at all for Sesa or for any company in Goa?
Sharma: I don't know about individual cases but if this is the position as per SC judgment then this is the statement.
Q: What are the approvals needed before mining begins in Goa?
Acharya: As far as renewal process is concerned, mining leases can be given for initial period of 30 years. Subsequently there is a provision for first renewal period of 20 years. So for half a decade you can mine a particular lease which is granted by the state government.
As far as second renewal is concerned it can be granted up to a period of maximum 20 years at a time. So it is not illegal that you cannot grant second renewal. Now we have to examine the SC order clearly, they have declared leases as illegal with effect from November 22, 2007 precisely because by that time the state government was supposed to decide the renewal application by application of their mines and pass an order in favour if they were for renewals or if it was to be rejected, they were to be rejected as on that date. So this is a correct position of law which is provided under the MMRD Act 1957.
Q: But in effect that does not happen and this is not true just of Goa, the state government as Mr. Sharma says just sit on it, you don't get a yes or no and on the day of the leases expiring you are already in violation of the law. And you have 15000 workers, their families, is not Sharma right in saying that something proactive is needed that state governments have to decide on the renewal before the lease expires? And it is not as if companies don't ask them, companies repeatedly write one year, six months before the lease expires but there is no reply. So is he right in saying that on this issue the courts need to act because I guess this is in the state list and therefore this is not a central government directive but a court directive that is needed?
Acharya: There is already a provision inbuilt in MMRD Act and rules made there under that an application for renewal has to be made one year prior to the expiry of the lease and it has to be decided by the state government within one year provided all documents are in place. So most of the cases where documents are not proper, department is left with no option but not to process the request.
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