Steel ministry: Centre should license mining

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New Delhi: In a move that could fast track multimillion-dollar investments in the mineral sector, the Union steel ministry has proposed that licensing the mining of all strategic minerals—including iron and chrome ores, nickel, bauxite, and manganese—should be vested with the Centre instead of states. In separate letters to the Prime Minister and the mining ministry, steel minister Virbhadra Singh has opposed the new National Mineral Policy proposal to increase states’ powers to give various awards for mineral exploration & production.

“We need a tighter policy framework for mining under the control of the central government, which is in a better position to decide how national resources like strategic minerals are to explored, produced and used,” steel secretary Atul Chaturvedi told FE. The policy change is necessary in the country’s long-term strategic interest, he said. Currently, states grant mining leases in concurrence with the Centre.

The ministry’s move is prompted by the huge delays in awarding mining leases across the country, which many large domestic and foreign investors have found disconcerting. Public sector Steel Authority of India Ltd (SAIL) had to wait for about 12 years to renew six out of ten mining leases for the Chiria mines in Jharkhand. It is yet to receive the remaining four leases and the delay has affected SAIL’s ambitious expansion plans. ArcelorMittal’s projects in Jharkhand and Orissa, and

South Korean major Posco’s Rs 53,000-crore projects in Orissa too have stumbled on litigation arising out of the mining policies of state governments.

Global mining giants like BHP, Rio Tinto, Anglo American and De Beers have often complained about the uncertainties in India’s mining policies, even as they have evinced interest in prospecting & exploration in India. “There is need to codify the legal framework governing mining activities to bring greater transparency and predictability. Approvals have to be given in a time-bound manner,” said Chaturvedi.

Currently, there are huge delays in decision-making by state governments, which follow arbitrary and disparate policies. The Union steel ministry has argued for security of tenure and rights of transferability of various awards like reconnaissance permits, prospecting licences and mining leases. It, however, said states’ right to royalty from their mineral resources would need to be protected.