Panel limits foreign role in mining

Investors with 'proven track record and access to global finance' to be allowed entry.

An expert committee set up by the steel ministry has proposed that only those foreign investors having a "proper track record" and "access to global finance" and cutting edge technology be allowed to mine iron ore in India. This is along with a rider that the plants they set up ought to have a capacity of at least 10 million tonnes a year each.

The entry of foreign investors should be via a public limited company so that Indian citizens could also share the profit, said the committee, which will assist the ministry in formulating norms for iron ore mining.

The 13-member committee, headed by former Mining Secretary RK Dang, favours promoting "at least one major integrated steel plant in or near schedule (tribal) areas". In the report, it has recommended limiting the use of fines only up to 80 per cent as agglomerate or otherwise in captive leases of steel plants.

The draft calls for a special preference for professional mining companies with a proven track record to develop major deposits of 58 per cent or below haematite ores and reclaim dumps for supply to domestic market or exports after high-end for beneficiation.

Another proposal is for allocating a minimum of 70 per cent production for the secondary producers and allowing export of the remaining 30 per cent.

On the issue of dormant leases and reversal of recommendations, it has suggested that if a state fails to send its recommendation renewal application within 24 months, iron ore, manganese ore and chrome ore leases should be "deemed renewed" for the full period of 20-30 years.

The panel has recommended a time-bound urgent review of all such dormant ferrous leases. It has suggested consultations with the ministry of mines to disregard all cases where state governments reverse or withdraw a recommendation.

The panel wants the withdrawal of all road taxes, peripheral area tax, cess, mineral value taxes, other collateral taxes, and levies by any other name, imposed on mining and related transport of iron ore.

It has said a predetermined portion of royalty, say 20 per cent, should be kept in a separate "Mining Area Development Fund" by state governments for the exclusive use of development and welfare activities in and around mining areas. The committee has also suggested financial incentives and soft loans based on SDF to promote the setting up of ore beneficiation plants and smaller agglomeration units extensively.

The group has proposed that a new methodology of integrated pre-clearance from forest, environment and revenue angles notified for grant of lease should be attempted.