The industry expects the new National mineral policy to introduce the concept of merchant mining and suggest the phasing out of captive mining, according to Ravi Kastia, managing director and CEO of Essel Mining & Industries Ltd, an arm of the Aditya Birla group.

The changes are expected to be incorporated in the Bill that seeks to amend the existing mining laws.

Kastia, who is also chairman of the Confederation of Indian Industry?s national committee on mining, said the CII had proposed to the government that it allow the resource sector to ?develop on its own right?.

?We have learnt that our proposal has been adopted in the draft content of the Bill and the new national mineral policy would introduce merchant mining,? Kastia said.

Steel ministry sources told FE that the draft Bill, based on the Hoda Committee?s recommendations, was likely to be tabled in Parliament during the current session. However, with the session ending on December 7, there are also chances that it will come up in the Budget Session.

The nine-member Hoda Committee, headed by Anwarul Hoda, had submitted a report to the government in July 2006. The mines ministry had set up another expert panel to study and make relevant changes in the recommendations before submitting it to the empowered group of ministers.

Steel secretary RS Pandey said the ministry would decide its course of action after the Bill is passed.

Kastia said exploration, mining and smelting are three different verticals and each should be developed with a segregated approach. The government policy of allowing captive mining and barring foreign direct investment in mining has not attracted enough investment.

A user industry tends to develop a captive mine up the level that serves their purpose so the full potential is not exploited, he said.

Kastia said the current estimates of iron ore reserves in India are 22 billion tonne, but the figure could go up to 100 billion tonne if miners go below 100 metres. And only standalone mining companies would bring in the large investments to take this sort of initiative.

Kastia pointed out that even in small countries like Peru and Chile, companies spend much more on exploration, and the mining sector is dominated by independent firms.