The central government may consider tweaking the proposed Mines and Mineral Development and Regulation (MMDR) Bill, 2011, to retain its control in allocation of mineral concessions.
The existing MMDR Act, 1957, makes the Centre?s approval a must for grant of mineral concessions for most of the minerals, including iron ore, manganese and chrome. However, the MMDR Bill proposes to devolve full powers of extension, grant of mineral concession to the state governments. The states would not require any prior approval from the central government to grant a mining lease to be allocated mainly through the competitive bidding route.
The proposal has been objected by both the steel ministry and the private companies. The steel ministry has written to the department of mines, seeking a change in this provision as it would lead to lopsided industrial and economic development. The ministry is of the view that if states become the single authority for mine allocation, it would be difficult to allocate iron ore mines to the steel companies which have no captive mines or have limited captive resources.
?For a company like Rashtriya Ispat Nigam (RINL), which has a plant in non-iron ore rich state Andhra Pradesh, it would be almost impossible to get a mine because most of the states would prefer companies that would add value in their territories,? a steel ministry official said on the condition of anonymity.
The steel ministry?s views have found support from the industry as well. ?The steel companies can either set up a plant close to resources or close to the market. However, with the proposed provision, the companies would have to set up plants only in the mineral rich states as they would grant concessions only on the condition of value addition in their area. This would be against the government?s idea of ?India for single economic growth?,? Arnab Kumar Hazra, director, Federation of Indian Chambers of Commerce Industry (Ficci), said.
The steel ministry has raised objections to some other provisions of the new MMDR Bill as well. It has also sought reservation of mines for the government-owned companies against the MMDR?s proposal to put all the mines under competitive bidding route.