Meghalaya not to encourage FDI in mining sector

SHILLONG - Bowing to pressure from local miners, the Meghalaya government Tuesday decided to do away with a clause in the draft mining policy that “encourages foreign direct investment” in the mining sector.

“The government would no longer encourage foreign companies to invest in this (mining) sector,” Deputy Chief Minister in-charge of mining and geology Bindo Lanong told journalists.

He said the decision to do away with foreign investment in the mining sector was taken after two rounds of talks with all the stakeholders, NGOs, and experts.

Meghalaya has a total coal reserve of 640 million tonnes, besides 5,000 million tonnes of limestone reserve and other minerals like Uranium.

“Foreign direct investment and technology by overseas corporate bodies and NRIs would be encouraged for mining, exploration, value addition in mineral sectors and environment protection as per the government of India policy,” the draft mining policy notified Sep 24, 2009 said.

However, due to opposition from local coal miners, the draft policy was put in cold storage for the past few years. The government, after notifying the policy, invited stakeholders, environmentalists, NGOs and experts for their inputs.

The coal miners immediately put their foot down, claiming that foreign direct investment would put them out of business and wanted the government to do away with such a policy.

Earlier, the government, while drafting the policy said foreign direct investment would help streamline the mining sector in terms of environment protection and introduction of new technology in a state mining where mining is being done in an unscientific manner.

Asked if the decision was regressive to discourage foreign companies, Lanong said: “The decision was not to encourage them, but there is no bar on foreign companies to enter in the sector.”

Now, it is not certain how the decision to discourage foreign direct investment would affect the French cement giant Lafarge already engaged in limestone mining in Shella and Nongtrai in Southern slopes of East Khasi Hills district.

The company also proposes to set up a Rs.1000 Greenfield integrated cement plant having a capacity of 1.1 million tonnes in Jaintia Hills district.