Even as the National Mineral Policy awaits a Cabinet nod, steel giants such as Areclor-Mittal, Posco, Tata Steel, Steel Authority of India Ltd (SAIL) and JSW Steel want to know the details regarding the implementation process.
?When the states reserve the right to recommend mining leases how would it be possible for the companies that do not operate in that state to ensure that mining leases are granted to them? There is no incentive for the states to recommend mining leases for steel plants outside the state,? quipped an industry insider.
?Not all steel plants are planned in mineral-rich states. So, how would the policy ensure that states recommend cases to the Centre for approval,? the source said. Currently, the Centre does not have power to recommend grant of mining leases. ?The policy should clearly spell out how would it be implemented.?
Companies such as SAIL, JSW Steel Ltd, and Essar Steel have integrated steel plants in states where there are no iron ore reserve. These companies, therefore, are dependent on mineral-rich states for the supply of raw material.
Sources said the draft talks about change in royalty rates on mining of iron and other ores. The states have also demanded that royalty should be decided on the selling price of the raw material, while the current royalty is on tonnage basis.
Considering the probable investment coming in the sector the policy, however, assures protection on the investment. ?The company that takes the risk of prospecting should be given priority for the grant of mining leases,? minister of state for mines T Subbarami Reddy said.
The industry also raised concerns over the point in the draft that encourages states to auction mineral blocks. ?If the highest bidder gets the mining licence, it would automatically reflect in the prices of finished products,? said an industry expert.
The national mineral policy has been in the pipeline for the last couple of years. The draft by and largely is based on the Hoda Committee recommendations and has attracted conflicting views from stakeholders such as steel industry, stand alone miners and the state government.
Orissa chief minister Naveen Patnaik recently wrote a letter to Prime Minister Manmohan Singh and requested that the final draft, before it is tabled for Cabinet approval, be circulated among the miner-rich states.
