The mines ministry has shot down the steel ministrys proposal that iron ore should be classified as a strategic mineral.
The mines ministry argues that iron ore is available in abundance in the country and hence there is no pressing need for the classification. It has written to the parliamentary panel,currently scrutinising the mining Bill,that steel makers need to utilise the entire produce of ore to ensure its total conservation rather than clamouring for curbing its exports.
The reproof came in a recent note to the Parliamentary Standing Committee on coal and steel. It added that 28.5 billion tonne of ore is available in India and its reserves are likely to go up with further exploration.
The mines ministry also hit out at the steel industry for seeking captive mines to ensure raw material security. The ministry acknowledged the concern on assured mineral supply but said that giving captive mines is not an optimum solution as it has inherent limitations as such mining generally leads to under-utilisation of the inferior grade of ores. In the absence of adequate beneficiation and agglomeration capacities in the country,steel companies are unable to process and utilise the mineral.
Besides,there is also a need to focus on encouraging ultra mega mining projects by organisations like the National Mineral Development Corporation,which can ensure complete utilisation of the entire ore produced.
The mines ministry decried the emerging trend among mineral-rich states to demand value-addition within their respective boundaries,saying mineral resources belong to the nation and there should not be restrictions on inter-state movement. The fragmentation of a single economic space can lead to mis-allocation of resources,it said.
The ministry told the parliamentary panel that the steel ministrys demand for allocating captive mines to state-run units like NMDC is unacceptable as it runs counter to the spirit of a level playing field,which is essential if private investment,especially FDI,is to be attracted to Indias investment-starved mining sector.
There should be a level playing field between the private and public sectors and the government should adopt an arms length approach. It is essential to distinguish between the states role as a promotional explorer and a commercial miner, the ministry pointed out.