The Hindu Business Line : GoM may give nod for new mining policy

Speaking to reporters on the sidelines of a seminar here on Wednesday, Dr T. Subbarami Reddy, Minister of State for Mines, said, “The policy is likely to be cleared by the GoM after the meeting on July 6 and then we hope to table it in Parliament during the monsoon session.”

The Union Cabinet had referred the mining policy to a GoM headed by the Home Minister, Mr Shivraj Patil, to address the issues facing both the steel and mining industries and recommend a policy conducive for the overall growth of both industries. The GoM has had consultations with both steel and mining sectors besides environment experts and is understood to have finalised the suggestions and will fine-tune them during the next meeting.

Giving a brief overview of the policy, Dr Reddy said that once the policy is implemented it would encourage international entrepreneurial participation and also help in getting the licences faster.

“It is also important that Indian companies join hands with foreign counterparts as mining is a capital intensive sector and also requires a lot of expertise in exploration. It is also important for financial institutions to come forward and support companies though there is risk involved,” Dr Reddy added.

The Government has been concerned over the lack of investments in the mining sector especially the lack of foreign participation.

The Minister also said that the Government expects an annual investment of a minimum of $2 billion and create an additional five lakh jobs in the next five years.

“Currently only five per cent of the total 18.5 lakh sq km of mineral wealth available is being mined and this is the main reason why the sector contributes only 2.8 per cent of the gross domestic product (GDP) which includes contribution from fuels. Of the total contribution only 0.8 per cent comes from the mineral wealth. While the worldwide investment in the sector is close to $5 billion in India it is only $2 billion. This has to change and we hope that the scenario improves once the new policy is adopted,” Dr Reddy said.

The Minister added that the Government envisages contribution close to Rs 1.5 lakh crore to the GDP if the new policy is implemented in an expeditious manner.

Apart from this the new policy is likely to empower state governments to fix royalty rates on value addition basis. On the issue of granting mining lease to South Korean steel giant Posco, the Minister said the Centre and his Ministry has asked the state government to expedite the process.

Dr Reddy also announced that environment clearances for mining relating issues would be made simpler in consultation with the Ministry of Environment & Forests so that the mining sector receives a large number of investment proposals.

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