Policy Analysis: Mine Closure in India

Mining brings about socio-economic changes in the vicinity areas. Local communities adapt to these changes and may depend entirely on mining activities for their livelihood. Consequently, the closure of a mine can induce a high level of social tension. It can escalate into protests and agitations, jeopardising the ‘social license to operate’ for future mining endeavours (Rao & Pathak, 2009).  Mine closure is the formal process of planning and managing the decommissioning of a mine site, mitigating impacts, carrying out environmental rehabilitation, and eventually relinquishing the lease (Mine Closure Hub, 2022). It is a significant challenge faced by mining companies, governments, and communities across the globe.

In India, existing mine closure legislation lacks provisions to adequately address the socio-economic and cultural aspects, highlighting the need for an improved policy paradigm.

In India, existing mine closure legislation lacks provisions to adequately address the socio-economic and cultural aspects, highlighting the need for an improved policy paradigm. The Union government has also noted that the existing closure plan is technical and fails to address the rehabilitation of labourers and the social impacts of closure (Deoghoria, 2022). The current policy focuses on technical aspects like dismantling building structures, removing tailing materials, and decommissioning mining machinery. However, there is insufficient attention to transitioning the community from mining-dependent livelihoods to a post-mining economy.

The objective of mine closure is to minimise negative externalities, including environmental, physical, social, and economic impacts, while creating a suitable landform for future uses. Effective enforcement of mine reclamation policies, establishing financial mechanisms, and promoting sustainable mining practices in consultation with stakeholders and integrating global best practices are crucial to facilitating successful mine closure (Jyoti et al, 2023).

Regulations on Mine Closure in India

In 2003, the Mineral Concession Rules 1960 and the Mineral Conservation and Development Rules (MCDR) 1988 were amended to mandate all mining leaseholders to submit a ‘Progressive Mine Closure Plan’ (PMCP) prepared for five yearly periods as a part of the Mining Plan (Table 1) (Indian Bureau of Mines, 2011).  Additionally, a Final Mine Closure Plan (FMCP) must be submitted two years before the proposed closure of the mine. Approval and implementation of the FMCP are necessary for legally abandoning a mine site.

Table 1: Mine Closure Rules in MCDR[1] 2017

Source: MCDR 2017

The National Mineral Policy 2019 highlighted the significance of scientific mine closure in an orderly and systematic manner, focusing on restoring ecology and socio-economic aspects (Ministry of Mines, 2019). In 2022, the Indian Bureau of Mines (IBM) published a comprehensive manual for the appraisal of ‘Final Mine Closure Plan’ considering various factors such as sustainable waste disposal, topsoil, air and water quality management, handling of mineral rejects, disposal of mining machinery, tailing dam management, and the economic implications of mine closure (Indian Bureau of Mines, 2022). Additionally, the star-rating system of mines, overseen by IBM, assesses achievement in final or progressive mine closure and landscape restoration (Ministry of Mines, n.d).

Status of Mine Closure in India and the Gaps within

Dearth of Data

A significant challenge in assessing the closure status is due to a lack of publicly accessible information. Data on abandoned land extent, reserve status, timelines, costs, future potential, and measures by leaseholders and state government are lacking. Improper due diligence in monitoring the abandonment of mines exacerbates the transparent assessment of mine closure status, hindering the formulation of far-reaching policy propositions.

Government reports do not provide a comprehensive picture of the country’s mine closure situation. IBM identified 297 mine sites in India abandoned before the promulgation of the closure rules in April 2003, with 106 owned by PSUs, major corporations, and private companies needing reclamation. Of these, 24 have become operational, leaving 82 sites requiring attention. However, detailed information is missing for the remaining 191 sites from the initial identification of 297 abandoned sites (Indian Bureau of Mines, n.d).

Fund Utilisation

Post-2003, mining leaseholders were required to provide financial assurances. However, uncertainty exists regarding the utilisation of funds for reclamation activities. Regrettably, there is no effective mechanism to track and assess the utilisation of funds allocated for mine closure activities. Compared to Western Australia and Canada, the financial assurance required for mine closure in India is notably lower and does not effectively deter the defaulters. In Western Australia, 25% and in Quebec, Canada, 70% of the total restoration cost must be assured by the miners before starting the mining operations (McKinsyey&Company, 2014).  However, to increase the financial guarantees for mine closure in India, the sector has to be highly competitive and profitable to reduce any additional encumbrance on the small-scale mining companies.

Inadequate Consideration of Socio-Cultural Dimensions

The intricate relationships between indigenous communities and mined lands, as well as other institutional effects on the local economy, such as the outward migration of people and demographic changes, receive insufficient attention.

Mining activities and subsequent mine closure impact communities, their livelihoods, and the broader social fabric. However, the emphasis tends to be primarily placed on physical and environmental concerns, neglecting the socio-economic, political, cultural, and human well-being aspects. The intricate relationships between indigenous communities and mined lands, as well as other institutional effects on the local economy, such as the outward migration of people and demographic changes, receive insufficient attention. This lack of holistic consideration leads to long-term social and economic stagnation for decades after ceasing mining operations.

Comparing the Mine Closure Framework in India with International Standards

No mining company in India is a part of the International Council on Mining and Metals (ICMM). Incorporating its guidelines can make mine closure more effective and make India’s mining scenario more sustainable and attractive (Table 2) (International Council on Mining and Metals, 2019).  While all the rules and regulations are theoretically incorporated into the existing framework, the actual implementation of it at the ground level necessitates comprehensive scrutiny and evaluation.

Table 2: Comparison of ICMM’s Mine Closure Framework with the Indian Mine Closure Policy

Source: ICMM and IBM Guidelines

Policy Recommendations

Economic Diversifications

Diversifying the economy by promoting sustainable livelihood opportunities tailored to local should be encouraged. Broadening the scope of the current policy framework beyond providing mere compensations to facilitating alternate livelihood opportunities is imperative. Mining companies often undertake vocational training and capacity-building initiatives as part of their CSR activities. However, the focus must be given to the fact that these initiatives could yield tangible benefits and translate into actual employment opportunities.

Effective Land Repurposing

Land restoration should enable the resumption of agriculture, horticulture, and allied activities, focusing on decarbonisation and reinstating the region’s biodiversity with minimal landscape alteration. Introducing heterogeneous local species with medicinal, timber-yielding, and fruit-bearing capacity is vital to ensure perennial greening and a better survival rate.

The CAG report 2019 acknowledged some mine closure initiatives by Coal India Ltd. and its subsidiaries as good practices for green initiatives. For instance, Central Coalfields Ltd. established an eco-park with rainwater harvesting, drip irrigation, nurseries, mixed forestry, and vermicompost units. Closed open-cast mines were converted into lakes for rainwater harvesting, promoting pisciculture and groundwater recharge (Ministry of Coal, 2019). These successful case studies can be considered models to replicate the ecological restoration of mines for non-fuel minerals.

Interdepartmental Coordination and Stakeholder Engagement

Strong institutional support, multiple stakeholder engagement, industry-government collaboration, effective monitoring, and evaluation are prerequisites to execute environmentally and socially responsible mine closures in a time-bound and strategic manner. For example, Canada’s ‘National Orphaned/ Abandoned Mines Initiative (NOAMI)’ guided by representatives from the mining industry, governments, NGOs, and Aboriginal Canadians to provide recommendations for the improvement of abandoned and orphaned mines, exemplifies a unique multi-stakeholder endeavour to solve this complex industry challenge of national importance (Cunningham, 2017).

Comprehensive Inventory

There is a pressing need to develop an integrated and complete inventory of all abandoned or orphaned mine sites specific to non-fuel minerals across India.

There is a pressing need to develop an integrated and complete inventory of all abandoned or orphaned mine sites specific to non-fuel minerals across India. Essential information, such as the mining area’s extent, pertinent laws and regulations, physical, chemical, and geological properties, reserve status, socio-cultural attributes, cost-benefit estimates, future potential, and a user-friendly web-based mapping tool for site display, should be included to provide an enriched ‘state of knowledge’ to facilitate business opportunities within the realm of mining rehabilitation initiatives.

Integrating Social Transition

Integrating societal transition through inclusive and participatory involvement of the community, local NGOs, and CSOs is imperative to decide post-mining land uses and enhance the governance structure’s efficacy at all levels of implementation.

Additionally, site-specific accountability on mine closure should be given adequate attention by considering regional diversity. Moreover, mine closure is not a single-phase process, so multipronged strategies, long-term stewardship, and due diligence are crucial to attaining a seamless transition throughout the entire mining lifecycle rather than just at the end-of-life stage.

Mine closure is not a single-phase process, so multipronged strategies, long-term stewardship, and due diligence are crucial to attaining a seamless transition throughout the entire mining lifecycle rather than just at the end-of-life stage.

The author would like to thank Rajesh Chadha, Senior Fellow, Yashika Singh, Visiting Fellow, Karthik Bansal, Research Analyst, CSEP for their comments and inputs.

References

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Deoghoria, J. (2022, October 22). Comprehensive coal mine closure plan to include impact on human resource and society: Coal Secy. The Times of India. Retrieved from https://timesofindia.indiatimes.com/business/india-business/comprehensive-coal-mine-closure-plan-to-include-impact-on-human-resource-and-society-coal-secy/articleshow/95020540.cms

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Indian Bureau of Mines. (2011). Mineral Conservation and Development Rules, 1988 (As amended up to 2^nd August, 2011). Retrieved from https://ibm.gov.in/writereaddata/files/07102014115525MCDR%201988_02082011.pdf

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International Council on Mining and Metals. (2019, February). Integrated Mine Closure. Good Practice Guide. (2^nd ed.). Retrieved from https://www.icmm.com/en-gb/guidance/environmental-stewardship/2019/integrated-mine-closure

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