The new National Mineral Policy is claered by GoM
A Group of Ministers (GoM) cleared the national mineral policy that retains freedom of mining comapnies to export iron ore without any restrictions on quantity or quality. The policy would be sent to the Cabinet for approval.
There is a difference of opinion on iron ore exports between mining and steel industry. While the steel industry supported a cap on iron ore exports to meet the requirement of the growing domestic steel industry, the mining industry favoured unrestricted exports citing comfortable reserve position on iron ore. The domestic steel manufacturers fear that if all the proposed steel plants come in India, some will be deprived of iron ore and if free exports of iron ore are allowed, then prices also go up making the cost of making steel much higher.
The highlights of the proposed national mineral policy are
- It has been decided to give free hand to companies to export iron ore without any restrictions on quantity or quality
- It has been decided to provide captive mines to all steel units in operation up to July, 2006
- As part of policy, a process of competitive bidding could be intiated for allocation of captive coal blocks
- The new policy gives more powers to states to facilitate value addition within the country and give a boost to steel production. the state governments would be able to give preference to companies undertaking value addition within the state while alloting iron ore mines. This would mean that stand-alone mining activities would be disincentivised.
- The entire country would be treated as one economic region and states would have to permit transfer of iron ore outside the state if no one is willing to set up a plant there.
- While approving the policy, the GoM has reatined most of the recommendations of the Hoda Committee.
- The policy is mainly aimed at procedural simplication for attracting investments in the sector. It would also benefit the states, as under the new policy, the present system of specific rate royalty would shift to an ad valoreum rate of 7.5 percent. This move would increase the royalty earnings of ths states by almost six times.
Related Articles:-
0 comments:
Post a Comment