The long-awaited mining policy is likely to come up for discussion in the Cabinet on Thursday. According sources, the Cabinet would deliberate on issues including changes in royalty fees that states get and the movement of raw material within the country.
The policy, when cleared is expected to help open up the country’s huge untapped mineral deposits, and has been drawn up in consultation with the state governments for over two years. The mineral rich states had raised objections and demanded higher royalties as they currently get a maximum of Rs 27 for per tonne of raw material extracted.
Sources said that 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.
The chief ministers of five mineral-rich states including Orissa, Madhya Pradesh, Andhra Pradesh, Chhattisgarh and Jharkhand – had recently met the Prime Minister and apprised him of their concerns. Minister of state for mines T Subbarami Reddy recently said that the delay was on account of consultation that was required to accommodate views of 28 states.
?It has now to come to the final stages,? Reddy said, adding that the government wants to increase metals and mining sector’s contribution to GDP, which currently stands at just 2.8%.
The move assumes significance as the policy, if cleared, would help flow massive investments into the sector. There will be investments of Rs 5,00,000 crore, besides employment generation of over 10 lakh over the next six years.
Delays in securing mining licences have proved to be a major bottleneck in bringing in foreign direct investment into the sector. The Australian mining company Indo Gold Ltd has already applied for rights to explore gold and copper in Rajasthan.