 "Whoever wants to invest in India, we will help them: Narendra Singh Tomar")
A day after the auctioning for minerals was notified by the central government, Union Minister of Steel and Mines Narendra Singh Tomar spoke to Jyoti Mukul and Deepak Patel on the journey so far and how the sponge iron industry and special purpose vehicles with the state governments for steel production will be the next focus area for him. Edited excerpts:
In your two ministries of mines and steel, how do you plan to take forward the government's 'Make in India'?
There was a complete deadlock in the mining sector for the past five years. We were not able to deal with about 60,000 files which were pending. People were looking for a transparent process. For that, it was necessary for us to bring amendments in the Mines & Mineral Development and Regulation (MMDR) Act. I am happy it has been passed by Parliament.
What about private sector investment, which is still not coming? Posco and ArcelorMittal have been trying to come in for more than a decade now. ArcelorMittal has now decided a venture with SAIL.
We are constantly making effort to attract investment but can only encourage private investors. They are welcome to come and invest and we will talk to state governments so that their entry is facilitated. Besides ArcelorMittal, we are in discussion with others, too, like Posco. To realise Make in India dream, the government is committed and whoever wants to invest here, we will help them.
The Centre also wants to set up special purpose vehicles (SPV) to increase steel production. What is the progress?
We have decided to have four SPVs along with Chhattisgarh, Jharkhand, Odisha and Karnataka. We have signed a memorandum of understanding (MoU) for a plant in Bastar of three mt capacity, involving investment of Rs 18,000 crore. It will later produce six mt. Total production from these four plants will initially be 12 mt which will increase to 24 mt. The government is also trying that investment in works like laying of a railway line should speed up and not be left for the Railways alone. Like from Rowghat to Jagdalpur. We are doing the work so that bringing raw material will become easier. Another MoU for a pellet plant in Jharkhand will be signed any day and talks with Odisha and Karnataka are going on. In steel, value addition needs a lot of research and development. Steel Research and Technology Mission of India has been created, in which Rs 100 crore has been put from the Steel Development Fund. Big companies in steel sector will also put in Rs 100 crore.
How far will the new mining law promote mining activity?
The auction process has been made completely transparent. UPA's MMDRA Act had this provision of a mine auction. But there was also this provision for first-come-first-serve. When you insert a tough provision and if there are easy provisions which are simultaneously kept there, nobody follows the tough provision.
Now, as auction is the only route for allotting mines, no state government or central government has any discretionary power. We have handed over the powers of the central government to states. Earlier, there was this procedure of getting prior approval from the centre; now the Act says states need to concentrate on auction.
How do you plan to promote exploration of minerals?
We have created a National Mineral Exploration Trust (NMET). Apart from NMDC and MECL, we have appointed central public sector undertakings such as SAIL, RINL,KIOCL, MIOL etc as well as state PSUs from Chhattisgarh and Madhya Pradesh were notified for exploration work. We are increasing our exploration work with their help. If there is better data available through exploration, even the states will get better revenue during auction.
Exploration is a capital-intensive sector where high-level technology is required too. Do our PSUs have that kind of money or technology?
We are forming some rules regarding that. Some money is allocated to Geological Survey of India (GSI) through budget,
NMET will get some revenue (2 percent of royalty), some money is with central PSUs, state PSUs will come too and ultimately states have to do the work. Like a state like Madhya Pradesh may give a site for exploration, giving some money from his own pocket in this pool. This is the way we want to move things forward.
And if we feel the necessity, and our economic conditions improve, more money will be allotted in the budget. We want to spend money for exploration. It has to be scientific too. It needs manpower too. Right now we have sufficient manpower. In case, we need more manpower, we will get that too.
The government had said that it will increase the import duty on steel from 10 to 15 per cent. When is it going to happen and will the government look at keeping steel out of future free trade agreements to promote domestic industry?
On duty, I am in discussion with the ministries of finance and commerce and I expect an outcome soon. FTAs are long-terms issues. Not much can be said on this. To respect international relations is a commitment of any government but it is also our duty to ensure that employment in our country is not affected.
When do you see mineral auctions beginning?
Major minerals are property of the state governments but they have not been explored properly. Auction has to be done by the state governments. Since it is a new thing, it takes time. They have to identify blocks and do exploration and then auction. But we expect them to start the process soon since they themselves are very keen.
Now with the rules for auctioning notified, what is next on your agenda?
We need to take forward the steel SPVs and also promote small industry like sponge iron. We work on it now.
In your two ministries of mines and steel, how do you plan to take forward the government's 'Make in India'?
There was a complete deadlock in the mining sector for the past five years. We were not able to deal with about 60,000 files which were pending. People were looking for a transparent process. For that, it was necessary for us to bring amendments in the Mines & Mineral Development and Regulation (MMDR) Act. I am happy it has been passed by Parliament.
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Work on expansion and modernisation of Steel Authority of India's plant was going on but could not be completed within the stipulated time. In the past few months, we monitored this continuously. I am happy that work at Rourkela and Burnpur has been completed. Durgapur and Bokaro is nearing completion. Bhilai work will be completed in September and the moment that is done, SAIL production capacity which is 13 mt a year will increase to 23 mt. Under SAIL's 2025 vision, we are working on the second and third phase expansion. It will involve increasing production capacity to 50 mt and will involve investment of Rs 1,50,000 crore. RINL expansion and modernisation is also complete and it will be commissioned by July. Both mining and steel sectors are major employment generator and also spawn small industry. These sectors will give a push to Make in India. IN one year, we have made a beginning, and I am quite satisfied with it.
What about private sector investment, which is still not coming? Posco and ArcelorMittal have been trying to come in for more than a decade now. ArcelorMittal has now decided a venture with SAIL.
We are constantly making effort to attract investment but can only encourage private investors. They are welcome to come and invest and we will talk to state governments so that their entry is facilitated. Besides ArcelorMittal, we are in discussion with others, too, like Posco. To realise Make in India dream, the government is committed and whoever wants to invest here, we will help them.
The Centre also wants to set up special purpose vehicles (SPV) to increase steel production. What is the progress?
We have decided to have four SPVs along with Chhattisgarh, Jharkhand, Odisha and Karnataka. We have signed a memorandum of understanding (MoU) for a plant in Bastar of three mt capacity, involving investment of Rs 18,000 crore. It will later produce six mt. Total production from these four plants will initially be 12 mt which will increase to 24 mt. The government is also trying that investment in works like laying of a railway line should speed up and not be left for the Railways alone. Like from Rowghat to Jagdalpur. We are doing the work so that bringing raw material will become easier. Another MoU for a pellet plant in Jharkhand will be signed any day and talks with Odisha and Karnataka are going on. In steel, value addition needs a lot of research and development. Steel Research and Technology Mission of India has been created, in which Rs 100 crore has been put from the Steel Development Fund. Big companies in steel sector will also put in Rs 100 crore.
How far will the new mining law promote mining activity?
The auction process has been made completely transparent. UPA's MMDRA Act had this provision of a mine auction. But there was also this provision for first-come-first-serve. When you insert a tough provision and if there are easy provisions which are simultaneously kept there, nobody follows the tough provision.
Now, as auction is the only route for allotting mines, no state government or central government has any discretionary power. We have handed over the powers of the central government to states. Earlier, there was this procedure of getting prior approval from the centre; now the Act says states need to concentrate on auction.
How do you plan to promote exploration of minerals?
We have created a National Mineral Exploration Trust (NMET). Apart from NMDC and MECL, we have appointed central public sector undertakings such as SAIL, RINL,KIOCL, MIOL etc as well as state PSUs from Chhattisgarh and Madhya Pradesh were notified for exploration work. We are increasing our exploration work with their help. If there is better data available through exploration, even the states will get better revenue during auction.
Exploration is a capital-intensive sector where high-level technology is required too. Do our PSUs have that kind of money or technology?
We are forming some rules regarding that. Some money is allocated to Geological Survey of India (GSI) through budget,
NMET will get some revenue (2 percent of royalty), some money is with central PSUs, state PSUs will come too and ultimately states have to do the work. Like a state like Madhya Pradesh may give a site for exploration, giving some money from his own pocket in this pool. This is the way we want to move things forward.
And if we feel the necessity, and our economic conditions improve, more money will be allotted in the budget. We want to spend money for exploration. It has to be scientific too. It needs manpower too. Right now we have sufficient manpower. In case, we need more manpower, we will get that too.
The government had said that it will increase the import duty on steel from 10 to 15 per cent. When is it going to happen and will the government look at keeping steel out of future free trade agreements to promote domestic industry?
On duty, I am in discussion with the ministries of finance and commerce and I expect an outcome soon. FTAs are long-terms issues. Not much can be said on this. To respect international relations is a commitment of any government but it is also our duty to ensure that employment in our country is not affected.
When do you see mineral auctions beginning?
Major minerals are property of the state governments but they have not been explored properly. Auction has to be done by the state governments. Since it is a new thing, it takes time. They have to identify blocks and do exploration and then auction. But we expect them to start the process soon since they themselves are very keen.
Now with the rules for auctioning notified, what is next on your agenda?
We need to take forward the steel SPVs and also promote small industry like sponge iron. We work on it now.