K'taka's 'rival' mining policy worries miners

Just days after the Union government's Group of Ministers (GoM) approved the new national mining policy to attract foreign direct investment to the sector, Karnataka, which is rich in iron ore and manganese resources, has evolved a 'rival policy' to counter it.

Unlike the national policy, which favours overseas investors, Karnataka's policy is aimed at attracting steel companies.

Last week, the GoM had approved the new mining policy aimed at cutting permit delays, boosting output and securing overseas investments.

The policy, which replaces a five-decade-old law, will be presented to the Cabinet in the next 15 days.

But Karnataka does not seem to be interested in the new policy. The state has issued a draft version of the policy in which it states: "It is a proven fact that the state stands to gain substantially both in terms of revenue, industrialisation, economic development and employment generation if the minerals are used for value-addition rather than export in the raw form.''

The order also said that the existing companies and those interested in setting up integrated steel plants will be given preference while granting mining leases over the export-oriented companies.

Recently, Karnataka rejected a private company's application for a mining lease in Chitradurga district, known for its iron ore deposits.

"Karnataka may favour steel companies. Many other states have followed similar models. How many of them have been successful? Iron ore-rich states like Orissa, Jharkhand and Chhattisgarh signed numerous agreements with various steel companies for captive mining. But, very few have materialised. This being the scenario, Karnataka cannot restrict mining leases to steel companies," said R K Sharma, Secretary General, Federation of Indian Mineral Industries.