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.

The steel ministry?s proposal is sure to infuriate mineral-rich states like Orissa, Karnataka, Bihar, West Bengal and Jharkhand. Of late, the states have been vying with one another to attract investments in the mining sector. At the same time, states with large deposits of iron ore and bauxite have made granting mining leases conditional upon applicants agreeing to set up steel plants in their respective states.

?We have pointed out to the industry ministry that this trend, which amounts to introducing back-door licensing of steelmaking, needs to discouraged,? Chaturvedi said.

Sources said mines minister BK Handique has convened a meeting of state mines ministers on December 5 for final discussions on the proposed amendments to the Mineral & Metals Development & Regulation Act, where the steel ministry?s proposal is also expected to be discussed.

?States should have a greater say when it comes to giving forest and environmental clearances, and rehabilitation of populations affected by mining projects. However, the Centre would be in a much better position to take an optimal view on the end use of minerals,? said KPMG director Hiranyava Bhadra.

New vein

* Prompted by delays in giving out mining leases

* Global mining giants irked by policy uncertainty

* Proposal is sure to infuriate mineral-rich states

* Dec 5 meeting of state ministers to review plan