What Forced The NDA Government To Ban Mining of Beach Sand Minerals

Last week, the Narendra Mod-led National Democratic Alliance (NDA) government took a pragmatic step by banning private companies from mining beach sand minerals. A gazette notification was issued in this regard on 20 February.

The Centre has barred private companies to mine beach sand for rare earth minerals like Ilmenite, rutile, leucoxene (that bear titanium minerals), zircon, garnet, sillimanite and monazite (which yields uranium and thorium) by notifying that the threshold limit for presence of such minerals will be zero per cent from the earlier 0.75 per cent.

The Centre’s notification last week is an extension of a ban on export of sand minerals imposed in August 2018. Then, the Directorate-General of Foreign Trade issued a notification saying that shipments would be regulated and only Indian Rare Earths Limited can export the minerals.

The latest notification is also a fallout of an order by a Madras High Court bench headed by the then acting chief justice Hulavadi Ramesh and justice R M T Teeka Raman. In a daily order issued on 27 March 2018, the judges said the central government “shall take effective steps as a policy decision and regulate the process of mining and restrict the license in respect of monazite”.

The government’s order has evoked reactions on expected lines. Environmentalists have welcomed the government notification, saying it would prevent coastal erosion in view of rampant mining by private companies.

The private industry has expressed its disappointment over the notification, saying that it would lead to loss of revenue and employment. Some have even commented that they would wait for a government change.

What is the beach sand mining case all about? Why is there so much of emotions over this issue? Why should foreign governments show interest? The Modi Government has been under pressure from all sides on the issue, including from foreign governments.

Let’s unravel the whole issue.

The Mines and Minerals (Development and Regulation) Act, 1957, (MMDR) and Minerals Concession Rule 1960 govern granting of mining lease for garnet, ilmenite, rutile, leucoxene, zircon sillimanite and monazite – all categorised under atomic minerals under MMDR.

Small amounts of thorium and uranium are present in monazite, which is also radioactive, that can be extracted through heating – a reason for placing it under atomic minerals.

For granting lease for mining of these minerals, state governments had to obtain prior approval of the Centre. In Tamil Nadu, 77 private mining leases have been granted for garnet and other associated minerals with the maximum – 52 – in Tirunelveli.

Tamil Nadu coastal areas are rich in minerals like garnet, rutile and ilmenite. Such minerals are found in Odisha, Andhra Pradesh and Kerala also.

In 1991, the Centre came up with an industrial policy statement reserving for public sector mining and production of minerals classified as “specified substances”. In 1998, a policy resolution by the Centre allowed private sector participation to maximise value-addition to raw minerals.

However, the resolution said that if monazite is produced in exploration of beach sand it would be disposed of in accordance with instructions from the Atomic Energy Regulatory Board (AERB) since export of specified minerals was monitored by the atomic mineral division of the Department of Atomic Energy.

In 2009, the AERB stipulated that a licence had to be obtained for mining and processing beach mineral sand deposits and it could be acquired after getting the lease from the state government.

The miners were obliged statutorily to pay royalty for these minerals mined from beach sand. They had to pay 3 per cent royalty on sale price of garnet and 2 per cent on sale price of rutile and limonite.

Since 1998, mining of beach mineral sands has been carried on by private players in Tamil Nadu. During the Dravida Munnetra Kazhagam (DMK) rule then, officials of mining, pollution control and environment departments reported about illegal mining of beach sand to the state government. All these reports yielded no result.

During the All India Anna Dravida Munnetra Kazhagam (AIADMK) rule from 2001-06 and again after 2011, when the party came back to power, officials complained about illegal mining but didn’t point fingers at private miners.

In between, the Union Ministry of Environment and Forest carried out an inspection of mining leases in 2000 following complaints, and it asked the Tamil Nadu Coastal Zone Management Authority to act against illegal mining.

Another inspection followed in May 2002 which found a leading private miner mining beach sand in the coastal regulation zone without valid permission from the Ministry of Environment and Forests.

The Tamil Nadu Government, in response, said that the private miner had got permission from the district coastal zone management authority. The Union Ministry, however, said it had not delegated its powers to anyone.

The Ministry of Environment and Forest gave a fortnight’s time to act against the violators. By that time, the miners moved the sessions court and got a stay on any action. A point to note is that illegal mining of beach sand had been found mainly in Tamil Nadu only.

Some drama took place in the meantime. In 2001, private miner V V Minerals got Department of Atomic Energy licence to mine beach sand minerals in several parts of Kanyakumari. In April 2002, the department sent a letter to the miner saying it cannot mine on 14 hectares in Midalam region of Kanyakumari since the Indian Rare Earths had got the rights on those land.

Soon, the then Kanyakumari collector Gagandeep Singh Bedi wrote a letter to the commissioner, Geology and Mining, Tamil Nadu, listing various reasons why V V Minerals should not be given mining leases in the district.

Bedi said that the survey areas mentioned in the application were part of the sea, some of the lands were common ones with locals opposing mining and the Indian Rare Earths Ltd saying that it too had applied for a mining lease. His letter to the commissioner bore no fruit as the latter approved mining leases for the private miner.

In August 2004, about 20 MPs headed by Congress member Dhanushkodi Adithan, made a representation to then prime minister Manmohan Singh, demanding investigation against complaints of illegal beach sand mining, particularly by V V Minerals.

Singh forwarded the representation to then chief minister Jayalalithaa for further action. The AIADMK government set up a committee to look into the complaints and sent a report giving a clean chit to the private miner.

In 2006, DMK was voted back to power and a year later a detailed report of various violations by some mining firms, including V V Minerals and Indian Rare Earth Ltd, was submitted but no action was taken.

Later that year, the Tirunelveli district collector issued a show cause notice to private miners on illegal mining but the action was dropped in December 2008.

Thus, beach sand mining went on smoothly despite all complaints of illegal mining until 2013, when the Jayalalithaa government, which returned to power again in 2011, set up a special committee under Bedi to look into the complaints in Thoothukudi district.

Bedi committee report listed various acts of illegal mining. Following the report, the Jayalalithaa government banned beach sand mining in September 2013. In addition, the Bedi committee was asked to look into the state of affairs in beach sand mining in other districts too.

Things took a turn for the worse for the private miners in 2014 when G Victor Rajamanickam, a PhD holder in mining geology, filed a writ petition in the Madras High Court alleging illegal mining, and government officials supporting such activities. The petition came up for hearing in 2015 but towards the end of that year, Rajamanickam told the court he wanted to withdraw his petition.

The High Court refused to allow his plea and converted it into a suo motu public interest litigation. Since then, the case is being heard by the court.

The High Court has appointed senior advocate V Suresh as the amicus curiae to help the court and asked him to submit a status report.

The amicus curiae reported rampant illegal mining and transportation of beach sand mining even after the state government banned mining in September 2013.

In particular, the miners continued to export on the ground saying that only mining was banned and not export. They claimed that the exports were from the stocks they had accumulated after mining beach sand.

The amicus curiae said some 9.65 lakh tonnes of minerals transported by V V Minerals were illegal, while he said the claim of the private miner that it had recovered 57.71 lakh tonnes of heavy minerals was not supported by the approved mining plan or scheme.

Not only V V Minerals but others such as Transworld Garnet India Pvt Ltd, Beach Minerals Sand Company and Indian Ocean Garnet Sands group had illegally transported minerals such as garnet, ilmenite and zircon, rutile, sillimanite and leucoxene.

The amicus curiae feared that though monazite could not be exported by private miners, it could have gone in the some other form. He said the miners had take advantage of various court rulings to continue illegal mining, processing, transportation and exports.

(Privately, fears were expressed that these monazite tails could have found their way in the garb of garnet to North Korea though no concrete proof has emerged.)

The loss to the government on account of the illegal mining of sand is estimated to be thousands of crores of rupees since at least the year 2000.

In the meantime, the High Court appointed a committee under IAS official Satyabrata Sahoo to inspect the mined sand stocks with the miners and present a report on the presence of radioactive minerals in them.

Sahoo reported that the mined sand contained minerals beyond permissible limits. He said 118 of the 220 samples his team examined, contained more than the permitted level of 0.25 per cent monazite allowed by the Department of Atomic Energy.

The Sahoo panel also found lower percentage of monazite in the tailings in some beach sand stocks, suspecting that the mineral could have been taken from the stocks and transported. The private miners, especially V V Minerals, have termed the findings as biased.

Similar problems have surfaced in Andhra Pradesh where its government has found violations of mining licence. A petition is pending in the Supreme Court seeking a probe by a court-monitored team or the Central Bureau of Investigation.

These series of actions have halted beach sand mining and transportation of minerals. This has led to other reactions from countries such as the United States, South Africa, Germany and Australia.

One of the reasons for their concerns is that these rare minerals, particularly garnet, is used in making abrasives for defence products like military hardware and weapons.

First to move the Indian government on the mining ban was the US, which accessed Indian officials through its embassy. This happened because a couple of US Congressmen took up the case of the Barton Group, which deals with abrasives and which feared that it would soon run out of garnet in view of the ban on mining and transportation.

During a meeting in October 2017 between officials of the Union Ministry of Mines and Tamil Nadu Department of Geology and Mines, the latter held firm that they would want the ban on mining and transportation to continue, though the Central officials favoured the removal of ban on both.

The main reason for the Central officials to dither was that the Modi government was under pressure from the US and Germany, which took the case of AMPECO and Steag Power Minerals.

One of the arguments put forth by the state officials was that the private miners should come out with the truth and pay the due royalty to the government. In fact, the state government officials convinced the Central officials to go along with their decision that has now led to the ban.

The Modi government has, probably, earned a breather from various pressures and pulls it has been subjected to in this case. It is likely that it could await the outcome of the cases pending in the Madras High Court and the Supreme Court.

With the Lok Sabha elections due in May, private miners could also bide their time, though the courts will have the final say on the matter.