Virbhadra: merge steel & mine mins

Written by fe Bureau | New Delhi | Updated: Dec 29 2009, 06:09am hrs
Union steel minister Virbhadra Singh is in favour of merging the mines ministry with his own. Speaking at an Idea Exchange programme of the Express Group on Monday, Singh said, Ideally, the steel and mines ministries should be merged. This is my personal view. If not merged, at least the power to grant mining leases for iron ore and other minerals used by the steel industry should be transferred to the steel ministry.

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.