Draft steel policy moots taskforce

 The task force of industry with government as facilitator will explore the possibility of barter trade and advantages of opening of mining sector for attracting investments into exploration and production.

 The government plans to evolve a policy on export of iron ore over a specific period. Enhancing the ceilings on export volumes of iron ore will also be considered on the grounds of barter trade of high-grade iron ore and metallurgical coal with the countries, which have large reserves of coal like China.

 The draft stated that the present policy of allowing liberal import of metallurgical coal on the grounds of poor quality of indigenous coal will be continued.

 However, since high cost of imported coal was responsible for substantial loss of cost competitiveness and neutralisation of the benefits of low iron ore and labour costs, the exploration, mining, beneficiation of high or medium quality metallurgical coal will be a priority area.

 Efforts will also be made to devise an appropriate incentive structure to attract foreign direct investment (FDI).

 The report clarified that the FDI will be from established companies with sufficiently large capital resources capable of bearing high initial costs.

 Further, the government will also encourage investment in captive coking coal mines in major source countries such as Australia.

 Comprehensive environmental audit of existing mines will be undertaken on a priority basis by the government with the objective of making these operations more environment-friendly in line with the emerging international trends.

 Moreover, sectors supplying essential intermediate inputs to steel making such as ferro-alloys, sponge iron and refractory will be given an export orientation.

 Despite availability of essential ores for production of bulk ferro alloys, the cost of power continued to ail the ferro alloys industry.

 Hence, the possibilities of cross-border investment in countries with cheap power will be adequately explored and supported by the government.