Odisha’s District Mineral Foundation fund collection highest in country

The Times of India | March 11, 2021
BHUBANESWAR: Odisha has collected the highest amount of Rs 11,984 crore among all the states under the District Mineral Foundation (DMF) fund since it was created in 2015, Union mines minister Pralhad Joshi told Lok Sabha on Wednesday.

Till January, a total of Rs 45,095.86 crore in DMF fund was generated in the country. Odisha got more than one-fourth of the share, the minister’s written reply revealed. Neighbouring Jharkhand (Rs 6,533.04 crore) and Chhattisgarh (Rs 6,329.78 crore) managed to collect the second and third highest amounts under DMF. Rajasthan is fourth, having collected Rs 4,496 crore.

The funds are contribution from mining companies operating in the respective districts, which has been mandated under the Mines and Minerals (Development and Regulation) Amendment Act, 2015. The mining companies pay 30% equivalent of the royalty amount for leases given before 2015 and 10% for leases granted after that when auction of mines and mineral blocks started.

A government officer said Odisha being a mine-bearing state, it is natural for it to garner the maximum amount, the bulk coming from coal, iron ore and bauxite.

Against an available amount of Rs 11,984 crore, the state has spent Rs 5,364 crore by January this year. The amount spent is also the highest in the country, though in percentage terms the state’s spending at 44.76% is marginally less than the national average of 45.10%. Countrywide, Rs 20,337.35 crore has been spent from DMF fund. Chhattisgarh has spent the highest 69.04% (Rs 4,370 crore) followed by Tamil Nadu at 54% (Rs 413.29 crore).

The ministry of mines had circulated guidelines for implementation of Pradhan Mantri Khanij Kshetra Kalyan Yojna (PMKKKY) in September 2015 on the use of DMF fund.

Though DMF has been constituted in all districts in Odisha, the seven districts of Keonjhar, Sundargarh, Jajpur, Angul, Jharsuguda, Koraput and Rayagada account for 90% of the funds. Some of the districts such as Sundargarh and Keonjhar used DMF fund for enhancing Covid care infrastructure. Many districts have used the funds to strengthen primary health centres besides livelihood and nutrition support programmes, among others.

Is Modi Government Planning on Selling State Govt. Owned Mineral Resources to Corporates?

News Click | Ayaskant Das | Feb 17, 2021

A draft notification by the Ministry of Mines says mineral blocks not auctioned by state governments can be auctioned by the Centre.

New Delhi: In an attempt apparently aimed at helping corporate houses appropriate a greater pie of natural resources of the country, the Modi government has proposed a law whereby the Centre can auction mineral blocks that belong exclusively to states. On February 9, the Union Ministry of Mines had issued a draft notification proposing a series of mining reforms, including the transfer of rights to auction mineral blocks to the Central Government.

The Mines and Minerals (Development & Regulation) Act, 1957 will be amended to “provide the power to central government to conduct auction (of mineral blocks) in cases where the State governments face challenges in conduct of auction or fail to conduct auction”. Among other reforms, the government has proposed to allow commercial trading of up to 50% of coal extracted from blocks allocated exclusively for captive mining. The Centre has also sought to do away completely with the mandatory requirement to conduct fresh assessments and obtain new clearances whenever successful new bidders take over mineral blocks from old leaseholders.

Even though the draft notification makes it amply clear that all proceeds from auctions of mineral blocks by the Centre will fully accrue to respective state governments, it is being claimed that the proposed legislation undermines the federal structure of the country: state governments not only own minerals (except coal and uranium) but are also fully empowered to decide when and how to utilise those resources.

Experts have questioned the intention of the Central Government in bearing the costs and rigours of the auction process if all proceeds will ultimately accrue to state governments. “State governments are trustees of mineral resources. They can use the power at their disposal to auction mineral blocks in accordance with their own needs,” said senior Supreme Court lawyer Sanjay Parikh.

The ministry has justified its proposal to take over the power of auctioning all blocks on the grounds that state governments have displayed tardiness in selling minerals. The notification stated that Central Government exploration agencies have – since the year 2015 – handed over geological reports for 143 mineral blocks which are ready for auction to various state governments.

However, only seven blocks from this list have been auctioned so far. The draft notification also stated that leases of 334 mineral blocks, out of which 46 were working mines, expired in March 2020. However, despite repeated prodding by the Centre, only 28 of those blocks had been auctioned by the states so far, it said. The idea to auction a greater number of blocks on a regular basis has been justified on the basis of the assumption that this will ensure continuous supply of minerals in the country. It has further been reasoned that a delay in conduct of auctions has a substantial impact on the availability and prices of minerals.

“Where will the concept of inter-generational equity go if all mineral resources are auctioned together? Mineral resources have to be extracted in a very reasonable manner in accordance with our requirements. Otherwise it will lead to zero balance of resources for future generations. In the past there have been instances of fake letterhead companies buying over coal blocks even if those firms had no involvement in manufacturing activities of any nature. Immediate and wholesale auction of mineral blocks will result in precious natural resources going under the control of only those corporate houses who not only have very deep pockets at the moment but also have the power to compete for bids. There will be manifold adverse impacts on the local environment too if, by any imagination, all mineral blocks are subjected to extraction at the same time,” Parikh told Newsclick.

It has been speculated that any attempt by the Centre to take over powers of state governments, as far as ownership and management of mineral resources are concerned, will be vehemently opposed. In the wake of an attempt by the Central Government to undermine federalism, which forms a basic structure of the Constitution of India, it is likely that state governments would challenge the amendment in court, thereby resulting in a complete derailment of the mineral block auction process. On the other hand, an alternative exists for the Centre in the form of extending assistance to states for conducting e-auctions, which is a faster and cost-effective process if at all there exists the need to sell more mineral resources.

In the proposed amendment to the Act, a provision has also been made to allow leaseholders of captive mines to sell up to 50% of minerals extracted in any particular year, after meeting end-use requirements, provided that an additional royalty, as prescribed by the Central Government, is paid. In continuation of this provision, captive coal block leaseholders will now be able to use 50% of extracted minerals for commercial trading. This proposal has been justified by the Centre on the assumption that it will reduce the import bill of coal and help bridge India’s trade deficit.

“There are numerous thermal power plants in India that have been designed to operate only with imported coal. Many plants are strategically located along the country’s coastline for easy availability of imported coal through the sea route. These plants can never switch to domestic coal. Further, there is no reason why the government should charge additional royalty for coal (or any other mineral) that is commercially traded after meeting end-use requirements. It will lead to an artificial increase in the cost of minerals and the burden of additional royalty will ultimately be transferred to the consumer. This goes against the spirit of Atmanirbhar Bharat. If at all, the government should withdraw all captive conditions from upon existing leaseholders,” said R.K. Sachdeva, former advisor (Coal) to the Government of India.

In March last year, soon after a total lockdown was imposed across the country on account of COVID-19, the Central Government had issued a notification giving a two-year holiday for new mining leaseholders wherein they could continue extracting minerals on the basis of old clearances provided they obtained new clearances by the year 2022.

The new draft notification proposes to completely do away with the requirement of obtaining new clearances: the old set of clearances can be used by new leaseholders till all resources are exhausted in the mineral block. It stated that new leaseholders are “facing difficulties” in obtaining fresh clearances which not only happens to be a “lengthy process” but is also “time consuming”.

“The proposal that no fresh clearances are required for new leaseholders is pro-industry and pro-development. Any break in mining operations for the sake of new clearances would have led to a discontinuity in business. Mine operators would have had to begin the entire exercise afresh after getting new clearances. It would have become difficult for mine operators to find ore again,” added Sachdeva.

Sections of the industry have welcomed the move to continue extraction on the basis of old clearances even though those pertaining to environment and forests are not within the domain of the mines ministry.

“An environmental clearance, once granted, is valid irrespective of change of ownership of a mine. But consent for establishment and operations have limited validity and need to be renewed periodically. These cannot be bypassed. Further, any mining plan approved by the Indian Bureau of Mines does not come with a lifelong validity. It has to be reviewed every five years. Each project proponent has to submit mining plans for the next 20 years, including a closure plan. The Indian Bureau of Mines reserves the right to revoke a prior approval in the event of deviations from the original plan,” said Rebbapragada Ravi of mines, minerals & PEOPLE, an alliance of individuals, institutions and communities affected by mining.

Questions have also been raised about the issue of the safety of workers engaged in mining activities while allowing continuous extraction on the basis of old clearances. Shouldn’t safety standards be reviewed periodically as leaseholders dig deeper into the earth to extract minerals? The Directorate of Mines Safety reserves the right to cancel operations in the event of safety norms not being followed properly or being violated intentionally.

Further, there exist a certain set of mining clearances that are granted by state governments including handing over of the lease itself, through agreement, by the respective Directorate of Mines & Geology. “If there is any change in ownership, the new leaseholder has to sign a fresh agreement with new terms and conditions. This includes the amount of royalty and also the issue of mining permits at regular intervals. Any extension of mining lease or change in ownership has also to be done through issue of government order by the concerned department which cannot by bypassed,” added Ravi.

Need to prioritise sustainable living to protect planet: expert

The Hindu | February 15, 2021

‘Planned urbanisation in countries such as India could serve as a great adaptation method’

Climate change and urbanisation are two of the most important phenomena facing the world today and they are inextricably linked, observed Fulbright fellow in Environmental Studies at Yale University (USA) Suman Chandra.

She participated in the discussions during the national webinar on ‘Climate Change Adaptation: Traditional Wisdom and Cross-Scale Understanding,’ jointly organised by GITAM School of Gandhian Studies and United States India Education Forum (USIEF), here on Monday.

She pointed that India ranks fourth in the list of countries that produce highest greenhouse emissions and this could be a result of massive urbanisation.

Ms. Chandra, who earlier served as District Collector of Buldhana district in Maharashtra, emphasised that we are on the cusp of a rapidly changing world and we need to prioritise sustainable living and make it a part of our lifestyle in order to protect the planet. She suggested that a planned urbanisation in countries such as India could serve as a great adaptation method.

A. Rama Mohan Reddy, former forest service officer, who extended his services in the Himalayan region, focussed on the impact of climate change on forests which include frequent fires, unforeseen floods, untimely flowering of various plant species and the likes. He also spoke about various measures taken by the Forest Department to mitigate the long-term effects and to improve forest cover.

Visakha Society for Protection and Care of Animals (VSPCA) member Priya Tallam spoke about resilience in coastal communities and various activities undertaken by the VSPCA towards the betterment of the ocean and the marine life along the coast of Visakhapatnam.

The panel of speakers included IIM (Ahmedabad) Professor Rama Mohan Turaga, Samata Executive Director Ravi Rebbapragada, Ashoka Trust post doctoral research associate Vikram Aditya, Tata Institute of Social Sciences (TISS) researcher Bijayashree Satapathy and Stanford University researcher Krti Tallam.

No plan to increase coal royalty for Odisha: Union minister Pralhad Joshi

The New Indian Express | Feb 11, 2021
The Centre has made it clear that there is no plan to increase royalty on coal and non-coal minerals for states like Odisha.

BHUBANESWAR: The Centre has made it clear that there is no plan to increase royalty on coal and non-coal minerals for states like Odisha. Replying to a question from Sasmit Patra (BJD), Union Minister for Coal and Mines Pralhad Joshi told Rajya Sabha that at present, states concerned are collecting royalty at 14 per cent (pc) ad-valorem on price of coal.

In addition, contribution towards District Mineral Foundation (DMF) at 30 pc of the royalty in respect of mining leases granted before January 12, 2015 and 10 pc on or after January 12, 2015 is also being collected by the states.

The Minister said due to ad-valorem nature of rates of royalty, there is increase in revenue to the coal producing states as and when price of coal increases. The decision has been taken basing the report of a study group constituted on July 21, 2014 for examining the issue of revision of royalty rates on coal and lignite.

The study group had submitted its report suggesting no change in the rates of royalty which the Centre accepted, he said. Chief Minister Naveen Patnaik during a virtual meeting with Joshi and Union Minister Dharmendra Pradhan in December 2020 had made a strong plea for revision of royalty for coal and non-coal minerals.

Sundargarh DMF fund finds way to non-priority sectors

The New Indian Express | Jan 16, 2021

When it comes to using the District Mineral Foundation (DMF) fund, Sundargarh district appears to have a soft corner for Rourkela.

ROURKELA: When it comes to using the District Mineral Foundation (DMF) fund, Sundargarh district appears to have a soft corner for Rourkela. The DMF guidelines are clear about priority and non-priority areas but DMF funds find their way to the Steel City which is neither directly nor indirectly affected by mining, a criteria for spending the funds.

Last year, when Rourkela Police unveiled a fleet of 25 brand new Innova Crystas to patrol the roads of Rourkela, eyebrows were raised because the multi utility vehicles were procured using 4.65 crore from the DMF. Of the 25 MUVs, 20 are meant for Rourkela while five are deployed in Bonai sub-division. Interestingly, before that the district administration is learnt to have spent 25.52 lakh from DMF pool for what it called ‘engagement of police patrolling and traffic management’ for Rourkela city, reveals information secured through RTI. How the new vehicles helped police intensify patrol is another story, given the spate of crimes that rocked the Steel City last year.

RTI activist Rashmi Ranjan Padhi citing the RTI reply said the administration spent ` 25.52 lakh towards ‘engagement of police patrolling and traffic management’ in Rourkela Municipal Corporation (RMC) limits but details were not provided, not even year of expenditure. However, reliable sources informed that the expenditure was incurred during 2017-18 towards hiring of police patrol vehicle for Rourkela.

“Rourkela city is not directly or indirectly affected by mining operation. Besides, using DMF on swanky MUVs and police patrolling makes very little sense,” said Padhi, who also is former Secretary of Odisha Pradesh Congress Committee (OPCC).As per available information, the total collection of Sundargarh DMF stood at 2,133.27 crore till June 30, 2020. Till then, at least 2,094.12 crore was spent or work orders awarded against 3,672 projects. Padhi claims that many of the spendings do not comply to DMF norms.

The mineral foundation released 78.56 lakh towards construction of main gate, boundary wall and 30 shops at Madri Kalo Bhawan of Sundargarh town. Similarly, approval was given for 64.99 lakh towards construction of boundary wall of a truck terminal at Amlipali in Sundargarh town in February 2019. In July 2020, ` 49.12 lakh was sanctioned towards raising of boundary wall and barbed fencing of Circuit House of Sundargarh town. Sundargarh Collector and DMF Chairman-Cum-Managing-Trustee Nikhil Pawan Kalyan did not reply to written request for comment.

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