The Central government has reversed its 20-year-old liberalisation policy on the export of beach sand minerals (BSM) by private firms. It has decided to allow only the Indian Rare Earths Ltd (IREL), a 68-year-old undertaking falling under the ambit of the Department of Atomic Energy (DAE), to export the minerals.
According to a notification issued by the Directorate General of Foreign Trade (DGFT) recently, the export of rare earth compounds classified as BSM – ilmenite, rutile, leucoxene (all titanium-bearing minerals), zircon, garnet, sillimanite and monazite (uranium and thorium) – would be regulated as per the Indian Trade Clarification (ITC) classification, following the Harmonised System (HS) of coding. An entry called 98A has been included in Chapter 26 (‘Ores, Slag and Ash’) of Schedule 2 [export policy] of the ITC (HS) classification of export and import items.
Of late, operations relating to BSM have become controversial in Tamil Nadu. In the wake of reports of illicit mining of BSM, the State government, in August 2013, ordered a ban on mining operations and issue of transport permits, which continues till date.
In the last five years, two panels of officials had gone into various aspects of the issue. A study was also conducted by amicus curiae V. Suresh. Reports filed by the panels and Mr. Suresh pointed to several irregularities. In July last year, referring to the litigation in the Madras High Court on BSM, Chief Minister Edappadi K. Palaniswami told the Assembly that a policy decision would be taken on mining of the minerals after the High Court’s verdict.
Asked whether the Union government’s decision of allowing only the IREL to import BSM was in response to any representation, a senior official of the DGFT told The Hindu that the decision was taken “at the highest level” of the government, “after elaborate discussions.”
Industry’s suggestion
The Federation of Indian Mineral Industries, citing a representation of the Beach Minerals Producers’ Association, Tamil Nadu, had made a suggestion to Union Commerce Secretary Anup Wadhawan calling for the establishment of a separate agency which would not be a producer of BSM for the purpose of exports and re-introduction of the practice of monazite test certificate [stating that the minerals, proposed by private firms for exports, did not contain monazite] so that the private sector could resume the exports.
In October 1998, the Centre opened the doors for the private sector allowing it to tap garnet and sillimanite through an “judicious” public-private participation model. Other components of the BSM were classified as “prescribed substances” under the Atomic Energy Act.
Effective January 1, 2007, the Central government delisted ilmenite, rutile, leucoxene and zircon from the list of prescribed substances, as part of further liberalisation. However, monazite was not disturbed. Answering a question on alleged illegal export of thorium-rich sand from Tamil Nadu, Jitendra Singh, Union Minister of State in charge of the DAE, informed the Rajya Sabha in May 2016 that as the export of BSM, barring monazite, would fall under the Open General Licence, there was no need for authorisation from his department. He also denied the allegation.
