ISA wants changes in mine allocation

Captive iron ore mines will be granted for only 10-11 million tonne steel capacity, if the Hoda recommendations are followed.

In a letter to the Prime Minister, Moosa Raza, president Indian Steel Alliance (ISA) has written that the Hoda committee recommendations restrict allocation of iron ore mines to only steel capacities existing as on July 1 , 2006.

This implied grant of mines for only 10-11 mt capacities in the case of Rashtriya Ispat Nigam Ltd (RINL), JSW Steel, Essar Steel and Ispat Industries. Steel Authority of India (SAIL) and Tata Steel had less than 20 million tonne, as on the specified date.

Mittal Steel and Posco's steel capacities are also yet to come up. But RINL, Essar and Ispat were unlikely to benefit from the recommendations either since they were located in states which have no iron ore mines.

Raza said in the letter that the recommendations would not help them get captive mines even for their existing capacities. The committee recommendations mentions preferential allocation of iron ore reserves for steel making capacities in the state.

ISA has requested the Prime Minister to amend the MMD Act & Rules to ensure that all existing capacities and committed expansions irrespective of their location get captive mines of appropriate capcity. These include RINL, JSW Steel, Essar Steel and Ispat Industries.

The association has also recommended ease of renewal of existing captive mines through appropriate legislation so that a public sector such as SAIL does not remain in uncertainty while planning expansion of capacities.

Among the other recommendations are ban of export of iron ore, place an immediate cap on export of iron ore, impose export duty to deincentivise exports.

Raza has also asked for a development fund with a corpus of around Rs 15,000 crore over five years formed with the export duty.

The fund could be used for strengthening of GSI, MECL and directorates of mining, research and development, afforestation, and for creating a safety net for the rehabilitation of tribals and rural mine workers.