The Hindu Business Line : Delay in mineral policy holding back global steel investments

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Delay in mineral policy holding back global steel investments

Apprehensions on iron ore block allocation, mining lobbies

Waiting on
Mines Ministry awaiting Cabinet nod for policy.
Close to Rs 1 lakh cr investments expected in next 10 years.
Call to ensure domestic need is met.

Phalguna Jandhyala

New Delhi, Dec. 17The delay in finalising the National Mineral Policy (NMP) is holding back foreign steel majors from announcing their India plans.

“Recently, officials from the International Iron and Steel Institute (IISI) had a meeting with various stakeholders involved with the sector, including officials from the Steel Ministry.

“One major point that emerged from the meeting was that there are a couple of global companies wanting to invest in India but the delay in the NMP is becoming a major obstacle,” an official in the Steel Ministry told Business Line.

He also said that the IISI officials pointed out apprehensions regarding the allocation of iron ore blocks for captive purposes, including conditions, allocations and stipulations that are holding them back.

To remove hurdles

The NMP seeks to remove the bottlenecks impending investments in the sector, where the Government expects investments close to Rs 1,00,000 crore in the next 10 years.

The Mines Ministry was hoping to table the policy in the last session of Parliament but it has not got the nod from the Cabinet, even though it was on the agenda on more than two occasions so far.

“Also, the IISI officials felt that since mining lobbies have a lot of clout in the local politics, it would be difficult to get clearances quickly,” he said.

MP opposition

On the other hand, recently a group of Members of Parliament (MPs) have opposed the implementation of the NMP in the present form and have said that the final shape of the policy has not been shared with either the State Governments or the industry.

The group of MPs has sent a memorandum to the Prime Minister, Dr Manmohan Singh, calling for strict regulation of the iron ore business with permission to export only after the need of domestic metal-based industries is met.

“The new policy should regulate exports of iron ore and only surplus production after meeting the requirements of domestic industry should be exported.

“However, exports of chrome and bauxite — used for making stainless steel — may be permitted and its value addition should be done by the domestic industry in a country where cost of power is competitive,” the memorandum stated.

Mining zones

The MPs have also said that special mining zones (SMZs) should be set up in mineral rich areas and for this purpose, the Forest Conservation Act should be amended to reserve forest land for SMZs.

“Auctioning of large mining leases should be for value additions. Applications for small mining blocks should be discouraged in view of lack of economies of scale of production, low cost technologies, and reducing availability of minerals for larger projects,” the memorandum said.

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