The Cabinet is likely to take up the much-awaited national mineral policy on Thursday. The government is anticipating fresh investments of about $ 2 billion to come into the mineral sector once the policy, based on the recommendation of Group of Ministers (GoM) on mining policy, is implemented.
The GoM headed by Shivraj Patil has proposed allocating captive iron ore blocks to companies, which does not undertake any value addition in mineral-rich states.
This view is contrary to the views of states such as Chhattisgarh, Orissa, Jharkhand, Karnataka and Rajasthan. These states fear that the clause, if incorporated in the policy, will jeopardise their plans to attract big investments as companies would prefer places with better infrastructure.
They also feel as a result of the proposed clause, their efforts to reduce poverty will come to naught.
The draft proposal also plans to introduce auction of explored blocks and the revenues from it will go to states directly. The Centre will only be working as a facilitator and will monitor if rules are being followed.
The GoM has given a green signal to continuation of iron-ore export, a move that was vehemently opposed by both the steel industry and steel ministry.
While, the steel industry has been demanding phasing out exports of iron ore saying at the current pace the country would have shortage of iron-ore after 20 years, the mining ministry is of the view that there was no shortage of iron ore in the country.
The GoM, while recommending against phasing out of iron ore export, has suggested ways to discourage export of precious natural resource through fiscal measures.