Singh was responding to a query on whether the steel ministry needs more powers to allocate iron ore mining rights to facilitate growth of the steel industry. He also said mining leases should be granted by the Centre and not state governments, as is the current practice. However, royalties should continue to be given to the states, the minister said.
Earlier, in an interview with FE, Singh had said royalty rates could be raised, too, to enable states to enhance their revenues.
The current norm is that before a state government grants a mining lease, it needs to obtain the Central governments concurrence. Currently, the mines ministry exercises power on behalf of the central government, which the steel ministry wants transferred to it. Steel and mines formed a single ministry in the past, but were separated due to the compulsions of coalition politics. Iron ore is the most important raw material for the steel industry. Most of the large steel mills in India have captive iron ore capacities. About 45% of the iron ore used by Indian steel companies comes from captive sources. Mills that are vulnerable to prices quoted by independent miners are, however, feeling the pinch, especially in the wake of the large increases in global iron ore contracts in recent years.