ISA takes up Hooda issues with PMO

The Indian Steel Alliance (ISA), represented by Steel Authority of India (SAIL), JSW Steel, Ispat Industries, Essar and Rashtriya Ispat Nigam (RINL), has taken up Hooda committee's recommendations on captive mining and iron ore export with the Prime Minister's Office (PMO).

According to steel industry sources, the PMO has assured that it would re-examine the matter. A meeting was held recently. Simultaneously, ISA and the companies were making representations to the ministry of mines.

The steel companies were pressing for ban on iron ore export in a progressive manner. The committee has recommended that export duty be levied on exports of iron ore in lump form with iron content above 65 per cent.

According to the presentation made to the PMO, Ukraine, Russia, China, Kazakhstan and the US, had 60 per cent of the iron ore resources in the world and yet were not exporting any iron ore other than 45 million tonne transferred for overseas operations. India alone was exporting 90 million of iron ore with the lowest per capital resources.

Steel industry sources said iron ore resources had reached an alarming situation. "At the current rate of growth in the steel production and iron ore export, 13 billion tonne of haematite (62-65 per cent Fe) iron ore resources would be exhausted in the next 20 years," they said.

Of the current production of 165 million tonne, more than 55 per cent of haematite ore was being exported and growing at the rate of 15 per cent annually.

The situation with magnetite (67-68 per cent Fe) ore was no better. Majority of the 10.68 billion tonne of magnetite ore was found mainly in western Ghats, which was ecologically sensitive and the Supreme Court had already stopped mining in the area.

The steel industry has also taken up the other contentious clause of captive mining with the PMO. The industry feels that all existing steel plants having a capacity of more than two million tonne should be given captive mines on priority.

The Hooda committee has recommended that steel capacities already in existence as on July 1, 2006 which do not have captive mines should be given preferential allocation of mines fully prospected by public agencies without the need for going through auction procedures.

However, the state could waive the auction for establishment of industry based on the mineral, if it wanted. The steel industry felt that the criterion for waiver was not clear.

If the state waived auction process for foreign steel majors, which were not in existence as on July 1, 2006, then the domestic steel players already in queue for the mines prior to their applications would not be done justice.