The below-the-radar mines and minerals industry is back in the news. A full bench of the Supreme Court has ruled the states have the right to levy taxes on mining operations, overturning an earlier 1989 verdict which had held only the Union government had the power to impose such royalties.
The court has made the ruling retrospective from 2005, opening up a Pandora’s box of fresh costs for mining companies. Some estimates put the combined hit at over Rs 2 lakh crore.
Mineral-rich states like Odhisa and Jharkhand will celebrate a new source of revenue, while mining companies will tear their hair reworking their costs. But where is environmental sustainability in all these calculations?
The Union and state governments, as custodians of lakhs of acres of forest and public land, have been ramping up mining operations for coal, iron ore, lignite and limestone to serve the rising demand for power, steel and cement.
It was a therefore a bold assertion by the Prime Minister in his Independence Day speech that India is ahead of all G20 nations on Climate Action and for achieving its renewable energy targets by 2030. Seen in the context of destruction of the environment by increasing mining operations, this claim sounded alittle hollow.
Destroying communities
India’s mining sector grew 7.5 per cent in FY24, with production of iron ore and limestone recording high growth during the year. Production of iron ore was at 277 million metric tonne (MMT) in 2023-24 against 258 MMT in 2022-23, registering a growth of 7.4 per cent.
While these figures indicate rising industrial production, the unrestricted exploitation of natural resources without the legally-required environmental protection measures, is proving to be devastating.
Let’s take the example of coal. It’s the dirtiest of fossil fuels and India has signed agreements to gradually phase out its use. Yet in the medium-term, the government has committed to double coal production, reaching 1.5 billion tonnes by2030. Union power minister Raj Kumar Singh at the Dubai world Environment conference – COP28 – said the target was to add 88 gigawatts of thermal power plants by 2032.
Government officials justify the expanding footprint of coal, arguing there is parallel development of renewable energy – wind and solar. The target is 500 gigawatts of renewables by 2030; but the rate at which solar and wind power was installed over the past few years, it is about a third of what’s needed, according to BloombergNEF.
The mining industry today is a threat to both indigenous communities as well as to our natural resources. The operations are in jungles and among backward communities and tribals, therefore inviting little scrutiny.
Gebra, in Korba, Chattisgarh, India’s largest coal mine spread over 19 sq kms, produces 35 million tonnes of coal per year. It’s expansion has denuded large forest areas and has disturbed the natural grazing habitats of elephants. This is turn has pushed the elephant herds into attacking village resources, leading to a major man-animal conflict, and even deaths.
In another well-known case, Vedanta, that had a concession for mining bauxite in the Niyamgiri Hills for its alumina plant in Laljigarh, Odhisa, attempted to oust the Dongria Kondh tribesmen from their traditional habitat. The tribes fought back. The legal battle went all the way to the Supreme Court, which in 2013 ruled in favour of the traditional rights of the tribes and the cultural and religious importance of their habitat.
Environmental damage
Extensive mining not only threatens communities but also natural resources such as top soil. Open cast coal mining, for example, is a major villain that depletes the nitrogen-richsoil and leaves behind miles of arid land and dust, unsuitable for any future planting or farming.
In the case of the Mussoorie Hills, limestone quarrying had a significant degrading effect on the entire Doon Valey. The limestone imbedded in the hillsides worked as a catchment for rain water that settled amidst porous webs of deposits. These worked as aquifers, releasing water after the monsoon into canals that fed the Dehradun valley during summer.
The uncontrolled quarrying led to a massive water shortage in the valley; and – worst of all – the hillsides became a mess of landslides as the continuous clawing on the slopes wiped out the trees whose roots held the gravelly hillslopes together. Limestone mining in the Doon Valley was finally banned. It’s a four-decade old story, but is now being repeated in Wayanad and other parts of the Western Ghats.
It is not that the law has no teeth. The Mines and Minerals (Development and Regulation) Act, 1957 and now its 2023 version,empowers the Union government to frame rules for mineral conservation, and protection of the environment. The Mineral Conservation and Development Rules (MCDR), 2017, especially Rule 40, provides detailed steps to prevent air pollution and gaseous emissions.
A not-so-recent Comptroller and Auditor General’s (CAG) report observed that during 2013-18, out of the 28 mines studied, pollutants exceeded the limits prescribed by Bureau of Indian Standards in 8 mines. It also said these mines continued to use ground water for their daily operations without permission.
Revenue from mining royalties can be calculated. But counting the cost of long-term environmental damage from mining and quarrying is a far more difficult task.