Ministry moots new closure plan to restore mining areas

NEW DELHI: In a bid to ensure restoration of mining areas sans ecological degradation, the mines ministry has proposed a new mine closure scheme which will make it mandatory for mining companies to give a financial guarantee to the government to fund the closures, prior to leasing.
Mines minister, Uma Bharti has sought the state government’s concurrence for the proposal, which is scheduled for discussion at the meeting of state mines ministers in December, Mines secretary, AK Kundra told ET.
In a recent communication with the Federation of Indian Mining Industries, the ministry has drawn the mining companies’ attention to similar schemes prevailing in countries like Australia and South Africa.
“While mandatory financial guarantee is one option under consideration for proper closure of mines, other proposals include the creation of a special-purpose vehicle which could be created by earmarking a percentage of the profits of mining entities,� the secretary said.
In addition, there could also be a mechanism to ensure simultaneous closure of mines while mining activity goes on. The secretary emphasised that the government would be firm in its decision to ensure that proper closure of mines would be a mandatory obligation for those obtaining lease permits in mining areas.
In a recent meeting of the Mineral Advisory Council, the proposal was accepted in principle. As per the MAC’s decisions, mining companies and lease-holders would also be required to take up infrastructure and peripheral development activities.
The mines ministry and the ministry of environment and forests have agreed to allow lease-holders to continue with mining activities while a lease renewal application awaits approval.
At present, the forests ministry disallows mining immediately after the expiry of the lease licence while the mines ministry permits continuance of mining operations during the time when the application is being processed, often creating conflicts on the issue.
The advisory council, the apex think tank for the mining and mineral sector in the non-fuel minerals category, comprises ministries of commerce, finance, the Planning Commission, state government departments, R&D bodies and the mining industry.