The Member Secretary,
GDC Sub-Committee and Regional Controller of Mines,
Ajmer Zonal Office,
Indian Bureau of Mines
Sub: Our comments and Suggestions on GDC sub committee report; and request to register our federation (FAPGI) as a stake holder in the decision making process, Reg;
Ref: GDC sub-committee Report
The Federation thanks you for preparing a well thought out, progressive, industry friendly and comprehensive sub -committee report and we consider that these are much needed recommendations for setting the stone industry on a reform path for making Indiaglobally competitive.
The Federation of Andhra Pradesh granite industry, (FAPGI) is a newly formed association and would like to work with the Government, policy makers and other stone associations. We request you to register our FAPGI with you and make it a part of your consultative process in the overall spirit of Governments inclusiveness.
As reported in your GDC subcommittee report, the royalty rates in the states like AP are already very high. Above all, our A.P. State government is imposing additional 30 percent DMF tax and it will further worsenour capacity to pay the royalty. FAPGI is in consultation with the State Governments on this issue. FAPGI is not against imposition of DMF. However, the rates of DMF imposedare not plausible to granite industry. We all know that the current rates of 30 percent DMF were calculated based on the studies of the major mineral from the states like Jharkhand, Chhattisgarh, Orissa where the quantum and the impact of mining on people and environment is considerably high. Whereas, the footprint of granite mining is very marginal as the total granite leases in the entire state of Andhra Pradesh is mere 53 Square Kilometers. (Even the figures given in the GDC report support the data). From our own understanding as insiders of the industry, the impact of granite mining is mostly positive as it is a biggest employment generator ( ref. your GDC report) and creator of wealth in and around the areas of granite mining.
Therefore,we recommend that there should be anindependent impact study on granite mining in all the state including A.P and then arrive at a DMF rate that is relevant to the industry. We request GDC sub committee should take up the impact studies of granite mining on people and environment in consultation with all the stake holders and arrive at DMF rate.
Moreover, while majority of the recommendations are not geography dependent and can be implementable across the states, consider and carefully examine if there are any specific regional aspects to be considered while implementing them.
We are here adding comments and suggestionspara by para to the GDC report.
Many of the conclusions and recommendations are well thought out and mostly data dependent and are in in tune with the sentiment of the Industry except one or two recommendations like Auctions and allowing the transportation of big blocks.
A copy with point wise comments to the suggestions to the sub-committee report is here with enclosed for your information and further action.
Kindly consider our suggestions too while finalizing the GDC sub-committee report.
Thanking you Sir,
For FEDERATION OF A.P. GRANITE INDUSTRY
Enclosures: Annexure 1: Comments on the GDC Sub-Committee’s recommendations
Sub- Committee’s Conclusion and Recommendation
- The Minimum size of granite quarry should be 5 hectares ….
Federation welcomes the recommendation of amendment of the provision of 5 hectare minimum size of the granite quarry as a principal in case of government lands.
However, in case of any specific deposit that is less than 5 hectares, by recording the reasons by the concerned Mines staff, the lease for less than 5 hectares may be granted.
There are many instances in the history of granite mining, some of the best and successful granite quarries are just around 1 hectare.
Therefore in the paradigm of overall sustainable mining, accepting five hectares as minimum exceptions can be taken into consideration.
Also for existing leases with less than 5 hectares, the lessee may be given discretion to increase the lease extent to five hectares or not depending on the availability of the land or not;
It Is to be noted that the contention of the Govt. to increase the existing leases to 5 hectares is for operational convenience, dumping and stock yard purposes only then Govt. can allow the lessees to add the existing acquired lands and dumping grounds to the lease;
- All existing leases of granite with less than 5 hectare area may be granted additional area for ancillary mining activities …..
Federation welcomes the additional grant of area within 500 M to the existing leases that are less than 5 Hectares; However, a clear policy if there is no area available within 500 M; and policy implementation hurdles in terms of NOC’s from Revenue authorities;
- The maximum size of the granite mining lease may be retained as 50 hectares as provided in GCDR 1999.
Federation welcomes the maximum size limit of 50 Hectares;
- The mining leases of granite may be of longer duration and initially lease period may be 50 years minimum…..
- The period of all existing granite leases may be extended to 50 years from initial grant….
Federation welcomes both d & e points.
- The rates of royalty on granite may be on tonnage basis instead of measurement basis for better royalty administration….
Federation welcomes the recommendation regarding taking tonnage instead of measurement of block for royalty while retaining categorization based on block sizes. The suggestion for the rates to the three categories is as follows:
Large blocks =Rs. 300 per ton
Small blocks = Rs. 200 per ton
Boulders = Rs. 20/- per ton
- For ensuring uniform royalty rates in different states the Government of India may prescribe upper limits of royalty for various categories….
Will it be a uniform rate/s across the states? If the minimum rates are implemented, the states with high rates would not want lose the revenue; if higher rates are imposed, the states where lessees with minimum rates would not want to pay;
How do you reconcile and bring a common and uniform rates across the states?
How do you convince the states to adopt a uniform rate policy?
How do you fix a criteria to adopt a upper limit;
- The royalty collection system may be simplified by all states for which they may adopt Rajasthan model of royalty collection with slide modifications, if any, to suit the needs of the state.
We welcome the move of outsourcing the royalty collection. It reduces the burden on the M&G department, higher collection, lower pilferage, helps the dept. of mines and geology personal to focus more on mineral resource development; May involve STATE FEDERATION as part of the monitoring committee and make them one of the stakeholders in the process.
- For effective monitoring of entire quarry activities, … the Quarry Management System may be introduced…
Implementing the QMS system is a most welcome move. It may be implemented phase wise by taking one or two model quarries into consideration in each cluster and gradually implement it in all quarries on a specified time line.
- The pre determined recovery factor should not have any relevance in estimation of royalty.
Federation accept the suggestion
- Dead rent should be so fixed that it is equivalent almost 30% of the average royalty collection from a quarry…
There are concerns regarding fixing the dead rents computed from the average of royalties paid in the previous year. One has to factor into market forces and any fall in the demand would lock the amounts; or else, the Govt. should allow and make provision to carryforward the dead rents for later usage;
- The State Governments may expedite finalization of their Minor Mineral Concession Rules in tune with the MMDR (Amendment) Act 2015 so that grant/renewal of granite quarry leases is not held up.
Welcomes the recommendation
- The mining leases of granite may be granted in a transparent manner by auction…
FEDERATION DOES NOT SUPPORT THE AUCTION PROCESSS. First cum first serve model holds good for the industry; First Explorer of a new deposit should be given priority.
- The area for waste dumping should be earmarked in the lease area and it should constitute a part of a lease area. The earmarked area may also be formed on a cluster basis or on individually, which may not be contiguous.
- The reclamation of waste dump in clusters should be ascertained and it should be part of responsibility of the leases using such cluster dump yard.
- The utilization of granite waste may be encourage for manufacturing of M-sand which is a effective substitute of scares commodity the river sand. The rates of royalty for granite waste used for manufacturing M-sand may be kept nominal.
- The processors which are using granite waste tiles for manufacturing of cobbles or artifact tiles may be encouraged.
- The Environment Clearance (EC) should only be applicable and Consent for Establishment (CFE) and Consent for Operation (CFO) should be dispensed with as EC stipulates all necessary conditions for scientific and sustainable mining and environmental protection and CFE and CFO also stipulates similar conditions.
- Many granite processing units of medium and large scale units have become technologically obsolete and need modernization and upgradation, which may be encouraged.
- India does not have all varieties of granites in colour and texture therefore, import of granite blocks of such colours and textures not available in India, may be permitted with quantitative restrictions on the lines similar to marble and import of granite blocks under OGL may be reviewed subsequently.
- Grant of industry status for granite mining may be considered to facilitate availing loans for mining from the banks.
FEDERATION WELCOMES ALL THE RECCOMENDATIONS FROM POINT ‘N’ TO ‘U’
FAPGI TEAM IN DELHI FOR ATTENDING GRANITE DEVELOPMENT COUNCIL MEETING
CHAIRMAN : SHRI- SIDDA VENKATESHWARRAO GARU , VICE CHAIRMAN :SHRI -A.RAJESH & JOINT SECRETARY : SHRI -DR CHRAO GARU
ANDHRAPRADESH MINES AND GEOLOGY JOINT DIRECTOR SHRI NAGARARU GARU ON THE MEETING