Cabinet to take up mining policy today

The new policy is expected to give a wider role to the Central government on awarding mining leases in order to reduce the time taken in the process. In order to lure private participation, it will follow the Hoda committee, which recommends automatic mining lease to a company that has prospecting leases and has successfully explored minerals in the region.

Conceding to the demands of mineral rich states, royalty rates are likely to go up, but the clause to discourage minerals from one state to be used in other states has been rejected. Currently, miners pay a maximum of Rs 27 per tonne of raw material. The new policy is likely to levy royalty on ad-valorem basis, especially for iron ore.

“State governments have been forceful in their stand on curbing inter-country transfer of minerals citing loss of revenue for parent states. However, the general consensus is that the country cannot be divided on the basis of mineral pockets and has to be treated as one,” the official said. “To compensate for any losses, royalty rates which have not been revised for a long time will go up.”

The new policy is expected to provide a fillip to the sector, which contributes only 2.8 per cent of the country’s GDP. That figure is expected to go up to 5 per cent while the total investment likely to take place in the sector is around Rs 5,00,000 crore over the next six years.