The Hindu Business Line : Mining sector against giving captive iron ore mines to steel cos

FIMI's rationale
Most of the exports are from the stand alone non-captive mines and are in the form of fines
The only way to regulate or reduce exports is to stop giving captive leases to the current as well as prospective steel companies till the demand and supply match in India

New Delhi , Sept. 12

The steel and mining industry's respective lobbying capacities are being put to test over the issue of iron ore exports and grant of captive mines to steel manufacturers.

Responding to the demand of curbing iron ore export and allocation of captive mines to steel manufacturers made by the Indian Steel Alliance (ISA), the Federation of Indian Mineral Industries (FIMI) has sought assured buyers in domestic market as that would gradually bring down exports.

To achieve this, FIMI has demanded a ban on granting captive iron ore mines to steel manufacturing companies.

Preservation of resources

The ISA as well as a few political parties have been demanding the prevention of export and preservation of the country's iron ore resources. They instead argue for exports of value added finished products such as steel.

In a letter to the Prime Minister, the Secretary General of FIMI, Mr R.K. Sharma, has said that, "At the present juncture when steel plants (existing and prospective) are assured of captive mines either by the Hoda Committee or MoUs signed with State Governments, it is not understood how the ISA clamours for banning exports."

Roadmap

The FIMI, in its letter, also tried to present a roadmap that would bring down iron ore exports.

"Most of the exports is from the stand alone non-captive mines and is in the form of fines. The only way to regulate or reduce exports is to stop giving captive leases to the current as well as prospective steel companies till the demand and supply match in India," FIMI said.

Explaining the rationale, FIMI officials said that if there were takers in the domestic market, exports would naturally come down.

"If no captive mines are granted, the exports will themselves gradually taper off," the FIMI letter said.

Existing mines

Interestingly, FIMI not only wants a ban on granting captive mines to steel makers, it wants the Government to take away the existing mines of Tata Steel and Steel Authority of India Ltd (SAIL).

Stating that companies without captive mines are efficiently competing with companies having captive mines such as Tata Steel and SAIL, the miners' body has urged the Prime Minister that "effort should be to take away excess captive mines from the existing steel plants at the time of renewal of their mining leases."

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