How political change is pushing up the price of sand in Jammu and Kashmir

This year, sand mining in Jammu and Kashmir has become a dangerous and costly business.

“The truck of sand is delivered to us at night,” said a sand contractor on the outskirts of Srinagar who identified himself only as Ahmad. “There is always the danger of the police seizing the vehicle.”

The business has gone underground after the authorities last year belatedly implemented rules notified in 2016 for the extraction of all minor minerals, including sand and gravel from riverbeds. Among other changes, the new rules made it compulsory for miners to obtain environmental clearances before starting mining operations.

But many miners are flouting the rules, contractors say. The risk involved in illegal mining is driving up the costs, they claim.

They also cite another reason why sand is becoming more expensive: the miners are no longer locals.

“Now, a Kashmiri is buying Kashmir’s own sand from a non-local extractor at a higher price,” complained a sand extractor from Ganderbal in Central Kashmir. “Then after adding his labour and other charges, he sells it to a Kashmiri customer at the increased price.”

A new landscape

Two separate processes – one, environmental, the other, political – have come together to produce a vastly altered landscape in Jammu and Kashmir for the extraction of minor minerals like sand, gravel, boulders, clay, limestone and gypsum.

Until the 2016 rules were enforced, riverbed mining in the erstwhile state was done by local miners over small plots of land through short-term royalty contracts.

But the new rules mandated that the authorities hold auctions for minor mineral blocks, measuring not less than five hectares in area, with leases granted for a minimum of five years.

The first round of auctions under the 2016 rules was held in June 2019. But it was not very successful. “Only five blocks were auctioned due to some internet issues,” said Vikas Sharma, director of the geology and mining department of Jammu and Kashmir.

However, this did not stop the authorities from holding a second round of auctions in December 2019 while the internet was suspended in Jammu and Kashmir, following sweeping political changes made by the Centre in August that year.

Not only was Jammu and Kashmir stripped of special status and split into two Union Territories on August 5, 2019, the Centre unilaterally dismantled Article 35A, which enabled the erstwhile state to define its permanent residents and reserve certain rights and privileges for them.

With the end of Article 35A, mining rights, which had been reserved for the permanent residents of Jammu and Kashmir, became open to all Indian citizens.

Since December 2019, more than 400 minor mineral blocks have been auctioned in Jammu and Kashmir. Most of them have been won by firms and individuals from outside the Union Territory.

The entry of outsiders

Local firms claim they were not able to join the auction because of the internet blockade.

“We didn’t have any avenue to place our bids,” said Mohammad Muzaffar, president of the mining association in Kashmir. “It looked like the government deliberately wanted to keep local contractors out.”

But Sharma denied the internet restrictions had anything to do with the poor showing of local contractors. “Such a scenario was inevitable because once auctions are open to everyone, you can’t remain in isolation,” he said. “Outside bidders are more resourceful and organised.”

Muzaffar contested this. “A Kashmiri contractor would have paid much more than a non-local bidder if they were given a chance,” he said.

However, many contractors admit that the local mining industry functioned on a small capital base.

“A group of extractors would choose a block and bid together under a cluster head,” explained the sand extractor from Ganderbal. “All of them would pool money for the block. By this arrangement, everyone would be in on the profits and make a living.”

“There was an assurance that even if the government demanded more royalty, locals would get a block to extract from,” he added.

Sharma, however, argued that Jammu and Kashmir had benefitted from opening up the mining sector to non-local firms – the auctions had fetched the government Rs 300 crores, he claimed. “Our main objective is revenue generation under a strict environmental protection framework,” he said.

As for local concerns, Sharma pointed out that the administration had plans to grant short-terms permits for extracting minor minerals on land upto one hectare to village and block councils. A statement issued by the administration said: “The decision is aimed at empowering [Panchayati Raj Institutions] to raise funds through mining surpluses and address shortages of key construction material in the local market, besides keeping a check on their prices.”

A reverse trend

Jammu and Kashmir’s move to open up minor mineral extraction to non-locals comes at a time when states like Chhattisgarh are reserving certain mining rights for their local residents. In 2019, Chhattisgarh issued a circular making domicile certificates mandatory for those applying for riverbed mining leases in the state.

While most states do not have any legal restrictions, local miners dominate the sector in many states. It is, however, not uncommon for miners to acquire mining rights in other states.

Scroll.in was unable to access a list of the firms and individuals that had won mining leases in the December 2019 auctions in Jammu and Kashmir. However, documents submitted by the lease holders while applying for environmental clearances show many of them are based in Punjab and Uttar Pradesh. The documents contain their addresses but no phone numbers or contact details.

Oddly, none of the outsiders who have won leases appear to have any presence in Jammu and Kashmir. They have outsourced operations to local miners, who continue to extract sand and gravel, but for a smaller share of the profits than what they earned earlier when they held the contracts themselves.

“All of us have become labourers for outsiders now,” said the sand extractor from Ganderbal.

Worse, these local extractors say they are now forced to work illegally, since the lease-holders are yet to secure environmental clearances.

Slow environmental clearances

On August 5, 2019, the Central government appointed three new members to the Jammu and Kashmir Environment Impact Assessment Authority. It also set up a eight-member committee of technical experts – the Jammu and Kashmir Expert Appraisal Committee – to assist the authority.

The Parivesh portal of the Jammu and Kashmir Environment Impact Assessment Authority shows 12 mining projects have been issued clearances this year, all in Jammu. Most are government projects run by public sector units such as the Jammu and Kashmir Minerals Limited and the Northern Railways. At least 27 proposals for mining projects were returned by the authority because of shortcomings.

A member of the expert appraisal committee, who did not wish to be identified since he is not authorised to speak to the press, pointed out that not many of the successful bidders had approached the authority for clearances over the past few months. “It means that they don’t feel bothered to,” he said.

“We have come across reports and complaints of illegal mining across Jammu and Kashmir,” he added. “The government needs to crack the whip on these lessees and make them approach the authority for clearances.”

The Jammu and Kashmir government, for its part, issued a statement on July 30 ordering that environmental clearances for minor minerals projects be fast tracked. Clearances had to be expedited “in view of the acute and unprecedented shortage of key material for development works and challenging Covid-19 pandemic,” the statement said.

The technical expert committee member, however, claimed the delay was squarely on the bidders. “Usually, it takes a lessee some three hearings, minimum, over a period of one and a half months, to get a clearance,” he said. “The ball is in the lessee’s court. The sooner he complies with the requirements and guidelines issued to him by us and presents them convincingly, the sooner he will get an environmental clearance.”

Cracking the whip

While clearances are awaited, the expert appraisal committee has repeatedly asked for a crackdown on illegal mining. The minutes of meetings held on July 14-15, reviewed by Scroll.in, show the committee asked for “strict advisories” to be issued to divisional commissioners, deputy commissioners, the pollution control board and the mining department to ensure that riverbeds were not mined without environmental clearances.

The committee also castigated the government for lack of authentic data about the replenishment of streams where mining blocks have been allotted.

A recommendation to streamline the clearance process and ease the burden on individual bidders was also made at the meeting, said another member of the expert committee, speaking on the condition of anonymity. “An idea was floated that the government itself gets all the environmental clearances and no objection certificates from various concerned departments – forest, irrigation, flood control, fisheries – before putting the mining block up for auction,” he said. “This will reduce the time taken to appraise the project.”

Environmental clearances do not mean the role of regulating agencies is over, he cautioned. “It is the mining department and other implementing agencies like the pollution control board who have to ensure that the miner doesn’t violate the terms of reference of his contract,” he said. “They have to be consistently monitored with the latest technology and surveillance mechanisms.”

Sharma conceded that there had been illegal mining in some areas. “We have a task force in each district, headed by the deputy commissioner, aided by the district police,” he explained. “The district superintendent of police is also a member. I have written to both the inspector generals of police (in Jammu as well Kashmir) to ensure no illegal mining takes place. Since most of the illegal mining takes place in the night, police support is essential. Three or four district mineral officers have been attacked as well.”

He claimed the longer contracts farmed out from December 2019 would ensure better environmental protection in the long run, since they would need formal clearances.

“Earlier, the environmental clearance process was a bit relaxed but from December 2019, we have been following a strict and rigid system,” Sharma said. “Temporarily, we are facing problems in the supply of material and illegal mining is taking place. But once the clearances are issued, people will take control of mining blocks under proper guidelines.”

Rising prices

Most sand contractors Scroll.in spoke to conceded that there was widespread illegal mining, partly because of the soaring demand for materials in summer. “Construction in Kashmir is carried out only in the dry months,” said Ahmad, the sand contractor who has been working in the sector for 20 years. “In winter, all the construction activity is stopped. That’s why we are seeing so much illegal mining.”

The high demand and the black market in materials had driven up costs for both contractors and final consumers. This had been further compounded by the new two-tier mining structure, with non-local lease holders sub-contracting operations to local extractors, and both earning profit margins.

“Before August 5 [2019], we used to purchase a truck of sand for Rs 3,500, maximum, but now the same truck costs Rs 6,000,” said Ahmad.

Sharma said deputy commissioners were mandated to regulate the price of minerals. “I think more than half the deputy commissioners have already issued rate lists for various minerals,” he said.

Ahmad pointed out that the fixed prices only apply to minerals extracted legally. “Can they regulate the price of minerals extracted illegally?” he demanded.