The Supreme Court's stay will hurt the sector, say mining industry experts
The mining sector is likely to face disruption following the Supreme Court's recent stay order on Tuesday to temporarily suspend the issuance of ex-post facto (after the fact or retroactive) environmental permits (ECs). Industry experts expect a decline in mineral production in the short term as existing mines cannot expand their operations without prior environmental permits.
“Any stay will result in a slowdown in mining activities, potentially causing an economic slowdown. The purpose of the retrospective ECs is primarily for extensions, with the aim of providing the mining license holder with uninterrupted access to mining activities,” said BK Bhatia, Additional Secretary General, Federation of Indian Mineral Industries (FIMI).
The production timeline could also increase by several years due to the stay, experts say. “Achieving earlier ECs could mean a break of three months to a year, depending on the size,” said another expert.
However, environmental experts emphasize that carrying out an EIA is a measure to mitigate the consequences. They emphasize that if mining activities have already caused damage, mitigation efforts may be ineffective or impossible.
“EIA is conducted before commencing mining activities with concerned agencies emphasizing on mitigation measures and monitoring the mining process. However, if they are carried out after the completion of mining activities, there is no provision for redressing the damage suffered,” Stalin D, director of NGO Vanashakti, which filed the petition in the SC, told Business Standard.
A mining permit is only granted to an entity after a preliminary Environmental Impact Assessment (EIA) of the project, which includes details such as the mining area, technology specifications and product mix. However, if the permit holder intends to increase production capacity, change mining technology or change the product mix, it must apply for a reference period and an Environmental Declaration (EC) according to the guidelines specified in the EIA Notice 2006.
On April 14, 2017, the Ministry of Environment, Forest and Climate Change (MoEFCC) implemented measures allowing retrospective ECs for permit holders who have inadvertently violated the provisions set out in the EIA Notification 2006. These violations may occur due to construction , expansion, modernization, or changes in the product mix.
The purpose behind allowing retrospective ECs was to allow leaseholders to continue mining operations without interruption. This flexibility allowed leaseholders to conduct mining activities while simultaneously applying for or acquiring the necessary permits following the said activities.
Despite initially having a term of six months, the special provisions specified in the 2017 notification were later extended till April 13, 2018. The Madras High Court has stayed the post-facto approval in the case of a mining project.
In response to numerous industry calls asking for more time for mining companies, the government extended the deadline. Furthermore, on July 7, 2021, the MoEFCC introduced a Standard Operating Procedure (SOP) for identifying and addressing these violation cases.
In its office note dated January 28, 2022, the MoEFCC allowed the approval of ex-facto ECs, with the exception of Tamil Nadu.
Stalin says there is no data on how many ex-facto ECs have been awarded since 2017.
“In cases where violations are discovered in the ex-post facto EC, there is no provision for imprisonment; instead, the penalty imposed is a fine of up to seven lakh rupees. These lenient punishments have led to cases of mineral exploitation and flouting of norms,” Stalin said.
Although the detailed number of ex-facto ECs has been calculated, the latter was awarded by the Center for Post-facto Environmental Clearance for the Khadia Opencast coal mine project for an increase in production capacity from 14 MTPA to 15 MTPA (an increase of 10 per annum) . cent wrt 10 MTPA) on a land area of 1640 ha by M/s Northern Coalfields Ltd. based in Uttar Pradesh and Madhya Pradesh) in its 3rd Expert Appraisal Committee (Coal Mining Sector) held from November 16-17, 2023.
First print: January 4, 2024 | 12:24 pm IST