SPV for reclamation of mining areas faces uncertain future

Centre's Mines and Minerals ordinance proposes separate District Mineral Foundation
Last Updated 10 February 2015, 20:56 IST

The Special Purpose Vehicle (SPV) meant to offset environmental damage in mining ravaged districts is likely to become defunct with the new Mines and Minerals ordinance coming into effect.

The Karnataka Mining Environment Restoration Corporation (KMERC), set up late last year by the State government, on the recommendations of the Central Empowered Committee (CEC), was touted to be the nodal agency to implement the Reclamation and Rehabilitation (R&R) plans in the districts of Tumakuru, Chitradurga and Ballari.

The State has appointed a senior IAS officer as the managing director of KMERC and given a corpus fund of Rs 3,500 crore for the purpose of implementing the R&R plans. It is estimated that the Corporation will have a fund of Rs 30,000 crore for the same purpose in the next 30 years after mopping up revenue in the form of premium collected from mining companies.

However, the Centre’s Mines and Minerals (Development & Regulation) Amendment Ordinance, 2015, proposes for setting up of a separate District Mineral Foundation (DMF) in every mining district across the country.

Nodal agency

The Foundation will be the nodal agency to offset the environmental damage caused due to mining. The Mines department states that the setting up of the DMF will make the SPV defunct, as both are being set up for the same purpose.

Sharing of funds

Mines secretary Tushar Girinath said that the State will now be forced to divide the premium amount, which is recovered from the mining companies, between the Special Purpose Vehicle and the DMF.  

“With the intention of not burdening the mining lessees further towards R&R, we have decided to adjust the money ourselves from the premium amount.

However, the  Special Purpose Vehicle is likely to lose funding drastically. While it will be a loss to the State government’s revenue, the Special Purpose Vehicle and the DMF will be doing the government work anyways,” he said.

When questioned whether the State can disband the Special Purpose Vehicle, Girinath said that it was impossible as it was the result of a directive issued by the Green Bench of the Supreme Court. Request on ‘C’ mines not considered

The Central Empowered Committee (CEC) which has been constituted for the purpose of keeping tabs on mining in the State has not considered a request by the State government to disallow two ‘C’ category companies from bidding in the fresh auctioning for the ‘C’ category mines.

According to Mines secretary Tushar Girinath, the department had recommended to the Central Empowered Committee to not allow two mining firms, which were involved in illegal mining, but are end-users.

“As per the recommendations of the State government, end users located in Karnataka can only auction off the mines. We had further recommended that none of the companies which were running the ‘C’ category mines should be allowed to participate in the auctioning process.

 However, the Central Empowered Committee has not yet considered our recommendations,” he said.

(Published 10 February 2015, 20:56 IST)

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