New export norms for miners likey

Mining firms may be brought on par with steel companies.

Mining companies may be brought on par with steel makers for grant of licences for mining of iron ore. The mines ministry wants this to be made a part of the mining policy being drafted by the Anwarul Hoda Committee.

Officials told Business Standard that there were divisions within the central government and between it and the states on the issue of value-addition.

State governments, particularly of Jharkhand and Orissa where economic development has been slow, have been signing memorandum of understanding with steel manufacturers like Korean steel major Posco, the LN Mittal group and the Tatas.

These companies are being pledged mining rights for iron ore.

The views of the mines ministry are in contrast with the opinion expressed by the steel ministry-appointed Dang Committee, which had made a case for giving preference to captive mining over mining for exports .

The mines ministry is of the view that the state governments should not insist on value addition by way of downstream user industries such as steel mills, though value addition in the form of pelletisation, benefication and blending will occur naturally.

In a draft policy document submitted to the Hoda Committee and the Prime Minister's Office, the ministry said in order to encourage foreign direct investment in mining it was important that steel-makers in the country offered international prices for iron ore and if they did not do so permission was given to export the product to the highest bidder.

"It is not that the mines ministry is against steel companies being given captive mines, but we feel that captive miners should be discouraged from exporting iron ore," said an official, adding that steel makers were offered an assured supply of iron ore not for exporting but producing steel. Besides, iron export by captive miners would lead to distortions in the export market.

The Orissa government had granted Posco mining lease rights for 30 years that would ensure supply of 600 million tonne of iron ore, of which more than 50 per cent is allowed to be exported provided an equal quantity is imported.

The government has set up a committee, headed by Planning Commission member Anwarul Hoda, to review the National Mineral Policy and suggest amendments to the Mines and Minerals Development and Regulation (MMDR) Act, 1957. The committee is expected to come out with a report by early next year.