No cap on iron ore exports: GoM

A group of ministers (GoM) today cleared the new mining policy""which seeks to attract $2 billion foreign direct investment annually""while rejecting the demand for capping iron ore exports.

"The GoM, while clearing the policy, decided against imposing any cap on export of iron ore. The issue of upward revision of export duty did not come up for discussion," an informed source said. The policy will now be placed before the Cabinet.

The GoM also refused to endorse the demand of the mineral-rich states of Chhattisgarh, Jharkhand and Orissa on value-addition and pointed out that the entire country would have to be considered as a single entity.

"They instead supported national value addition," a source said. This will have significant ramifications for steel companies.

Companies like Essar, Ispat, JSW Steel and Tata Metaliks which do not have captive mines will now be able to apply for mines in any mineral-rich state without having to set up plants in these states.

For instance, Tata Metaliks, which has applied for mines in Jharkhand and Orissa, can explore the possibility of setting up a plant in any other state.

Harsh K Jha, managing director, Tata Metaliks, said except Jharkhand, no other state had both coal and iron ore. If not Jharkhand, the company could set up facilities in a state where it had access to either coal or iron ore, he added. Tata Metaliks has a plant in Kharagpur, West Bengal.

JSW Steel is in the process of setting up a 10-million tonne steel plant in West Bengal, which does not have any iron ore. JSW had planned to cash in on West Bengal's coal blocks and buy iron ore fines from the market. However, the scenario might change now.

Seshagiri Rao, director, finance, JSW Steel, said if the Cabinet approved the policy, the company would apply for captive mines for the same project.

JSW Steel has already applied for captive mines in Jharkhand, where it plans to set up a 10-million tonne steel plant. Rao said the mines could also be used for the Bengal project.

Earlier, the Cabinet had referred the policy to the GoM to address the issues facing the steel and mining industries. The GoM broadly endorsed the recommendations of the Anwarul Hoda Committee, sources said.

"The GoM also disfavoured a revision of the duty on ore export," a source said.