The Andhra Pradesh State Cabinet approved the A.P. Minor Mineral Policy-2025. This policy aims to revitalise the mining sector, which has seen a decline in its contribution to the Gross State Domestic Product (GSDP). The contribution dropped from 3.53% in 2018-19 to 2.71% in 2023-24. The new policy focuses on easing operational challenges, supporting micro, small, and medium enterprises (MSMEs), and ensuring sustainability and transparency.
Revival of Pending Lease Applications
The new policy addresses over 6,000 pending lease applications. These applications were previously ineligible under the 2022 auction-only rule. The applications will now be processed on a first-come, first-served basis. A one-year window has been established for the issuance of Letters of Intent (LOI).
Dual Grant Mechanism
A dual grant mechanism has been introduced. Application-based leases will be available for building materials and granite. Industrial minerals will continue to be allocated through an auction route, with a production-linked premium.
Rationalised Lease Premiums
Lease premiums have been rationalised to reduce the financial burden on leaseholders. The new premiums are five times the dead rent, reduced from ten times, and three times for limestone slabs. Lease durations have been extended . Granite and industrial minerals can now be leased for up to 30 years, while road metal for captive use can be leased for 30 years.
Removal of Consideration Amount
The controversial ‘Consideration Amount’ imposed during the COVID-19 pandemic has been eliminated. A simplified, tonnage-based Seigniorage Fee system has been introduced. This change aims to make the financial aspects of mining more manageable for operators.
Digital Transformation Initiatives
Digital initiatives are a key feature of the new policy. These include end-to-end lease lifecycle management, drone surveillance, and CCTV monitoring. Such measures are expected to enhance transparency and accountability in mining operations.
One-Time Settlement Scheme
To address legacy issues, a One-Time Settlement (OTS) scheme has been implemented. This scheme allows for rationalised penalties and the scientific closure of abandoned leases.
Star Rating System for Sustainability
The government plans to introduce a star rating system for sustainable mining practices. This initiative reflects Andhra Pradesh’s commitment to responsible and inclusive mining operations.
Commitment to Sustainable Mining
The new policy signifies Andhra Pradesh’s renewed focus on sustainable mining. It aims to balance economic growth with environmental responsibility.
Questions for UPSC:
- Examine the impact of mining policies on local economies.
- Discuss the significance of sustainability in resource management.
- What are the challenges faced by micro, small, and medium enterprises in the mining sector? How can policy reforms address these challenges?
- Critically discuss the role of technology in enhancing transparency in mining operations.
Answer Hints:
1. Examine the impact of mining policies on local economies.
- Mining policies directly influence local employment rates and income levels.
- Revitalized mining can lead to increased investment in infrastructure and services.
- Changes in lease regulations can impact local businesses that depend on mining operations.
- Mining activities can affect local ecosystems, influencing agriculture and tourism.
- Effective policies can enhance community development through revenue sharing and local initiatives.
2. Discuss the significance of sustainability in resource management.
- Sustainability ensures that natural resources are available for future generations.
- It minimizes environmental degradation and promotes biodiversity conservation.
- Sustainable practices can enhance community health and well-being.
- Incorporating sustainability can improve corporate reputation and attract investors.
- Long-term economic viability relies on responsible resource extraction and management.
3. What are the challenges faced by micro, small, and medium enterprises in the mining sector? How can policy reforms address these challenges?
- MSMEs often struggle with access to financing and technical expertise.
- Regulatory complexities can hinder MSME participation in mining activities.
- Market competition from larger firms can limit MSME growth and sustainability.
- Policy reforms can simplify application processes and provide financial incentives.
- Support programs for training and capacity building can enhance MSME competitiveness.
4. Critically discuss the role of technology in enhancing transparency in mining operations.
- Technology facilitates real-time monitoring of mining activities through drones and CCTV.
- Digital platforms can streamline lease management and regulatory compliance.
- Data analytics can provide vital information about operational efficiency and environmental impact.
- Blockchain can ensure traceability of minerals and reduce corruption risks.
- Technology encourages stakeholder engagement by providing accessible information to the public.
