Jharkhand begins with a clean slate

Jamshedpur | Updated: Aug 1 2005, 05:30am hrs
While nature has endowed this 4 ,going on 5 ,toddler with ample resource wealth, it has been a story of marked poverty, illiteracy, deprivation and oppression. However, the creation of Jharkhand from out of the southern part of Bihar has brought a ray of hope for its original inhabitants, with the new political order trying to put in place a proper system of mineral exploitation.

The state is ranked No 1 in terms of both, deposit and production of minerals like iron ore, bauxite (aluminium ore), copper ore, mica, kyanite and uranium, among others. Jharkhand, with two successive NDA governments so far, is now laying emphasis on this sector, particularly on its largely untouched resources such as gold, manganese, graphite, granite, pyroxinite and marble.

The clearest indication of its new thinking was given recently by chief minister, Arjun Munda, who told an iron-ore hungry West Bengal that other states would get his minerals only after local industrys needs are met. The West Bengal CM agreed and proposed the eastern states establish mutual cooperation on the mineral resource front.

The state is also drawing up a mining policy and establishing a mineral advisory committee. A computerised geographical information system (GIS) has been set up to assist potential investors with data on the states mining resources. The new Jharkhand Mineral Resources Development Project (MRDP) is expected to be operational by next fiscal. This would act as a data bank for new discoveries, their gradation, training of personnel and help put in place the best practices in mining.

The problem here is that most of its hidden wealth lies under forest cover. With the state having no say in the issue of no-objection certificates, getting the necessary clearances from the Centre is a Herculean task

The state, which earned a royalty income of Rs 934 crore in 2004-05 from mining, wants the Centre to implement the Planning Commissions recommendation that royalty be calculated on an ad valorem basis, instead of the current far from the market-value situation.

Just consider, if the market price of a tonne of iron ore is Rs 2,700, we get only Rs 27 as royalty, which is just 1%, even less than the cost of stone, said a senior mining bureaucrat. Out of the total Rs 934 crore collected last year, only a paltry Rs 18 crore came as royalty from its iron ore reserves. However, as royalty on iron ore was last raised in October 2004, any further change would require an amendment of Section 9 (3) of the Mining & Mineral Development Act, since rates can be changed only after a minimum gap of three years.

With 92% of the total mining royalty coming from coal last year, the state is optimistic that the newly constituted committee, looking at coal royalty rates, would decide to raise the rate suitably. The rate was last raised in 2002. As the third-largest producer of coal in the country, the states revenue would rise substantially, if this were to happen.

The government is trying to bring about a significant increase in the number of mining leases, especially for iron ore mining, to boost the states revenues, said Mr BB Singh, director, mining.

The state has fixed Rs 1,100 crore as the total mining revenue target for fiscal 2005-06. We would try to see (this year) that the proportion of royalty coming from other minerals gets a boost, said Mr AK Singh, secretary of the department of mining & geology.

Forest cover is a stumbling block in respect of new mining leases, but if we can increase production at existing mines, we can avoid this hurdle, said the mining secretary.

The spirit is high, particularly with corporates like the London-based LN Mittal and Aditya Birla groups, taking keen interest in putting up steel and aluminium plants. But it will take a while to gauge the states success in optimal exploitation of its mineral reserves, and benefits, if any, for its tribal population.