Five CMs submit mineral policy proposal to PM

The chief ministers of five mineral rich states today urged the prime minister Manmohan Singh to make the local value addition of the minerals the prime objective of the National Mineral Policy (NMP).

They also demanded that at least 5% of the annual profit from mining should be set apart for socio-economic development of the tribal population in the scheduled areas. Modalities should also be evolved for the participation by the displaced persons in the equity of the mining company limited to the value of land compensation.

Besides, they said, the states should be adequately compensated for use of the minerals through an automatic ad-valorem based royalty structure and should not be left to the discretion of the central government. Moreover, the export levy should be entirely passed on to the states.

The team consisted of Orissa chief minister Naveen Patnaik, Chhatishgarh chief minister Raman Singh, Jharkhand chief minister Madhu Koda, Madhya Pradesh chief minister Shivraj Singh Chauhan and Rajasthan chief minister Vasundhara Raje.

In a joint memorandum given to the prime minister, they stated that the mineral bearing areas are deprived of agriculture and mineral based industries are the main economic activity in these areas. So the value addition of minerals within the state should be one of the prime objectives of the NMP-2007.

They argued that if such a policy is followed then the states can attract investment and reap the consequential benefits. This measure will help to redress the problem of regional imbalance, they urged in the memorandum.

It stated that minerals are one of the important resources for the states and their right to utilise the resources for leveraging the development of the concerned state must not be compromised in the new mineral policy. Besides, the NMP must recognise the need for captive mining for industries located within a state to meet their raw material requirement.

The intent of the draft NMP to attract foreign direct investment in the mining sector as fundamentally flawed, the memorandum argues that such a policy for bulk minerals like iron ore, bauxite, chromite, limestone, dolmite and manganeese, may result in a few multinational mining companies acquiring the control over vast mineral resources of the country that are required for domestic manufacturing industry.

Opposing the concept of seamless transition from reconnaissance to prospecting to mining lease for bulk minerals, the CMs said it will deny the states the opportunity of promoting mineral based industries within the state. They also strongly put forth their demand that export of minerals should be phased out as minerals are non-renewable and finite.

They also urged the prime minister to recognise the need for continuance of reservation for state public sector units (PSUs) for management and development of certain minerals of national importance.

In this backdrop, these chief ministers urged that a task force consisting of officials of the Union ministries and state governments to be constituted for finalising the amendments to the act and the rules on necessary for giving effect to NMP.