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Law ministry suggests a ban on export of iron ore

Differences between the law and mines ministries have widened on the issue of allowing mineral exports....

Written by Priyadarshi Siddhanta | New Delhi |
June 11, 2010 1:46:42 am

Differences between the law and mines ministries have widened on the issue of allowing mineral exports (of iron ore),with the law ministry demanding changes in the draft Mines and Minerals (Development & Regulation) Bill 2010 to ensure conservation of minerals.

So much so that Veerappa Moily’s ministry has asked the mines ministry to re-christen the legislation as Mines and Minerals (Conservation,Development and Regulation) Bill 2010. If this is done,the mineral exporters in general and iron ore exporters in particular would be hit hard. “The legislative department is of the view that the country is likely to lose mineral wealth forever if large-scale exports are permitted and for this reason conservation of minerals is to be taken into account. For this reason,it has suggested that the title of the draft Bill be re-christened to Mines and Minerals (Conservation,Development and Regulation) Bill 2010,” a law ministry official told The Indian Express.

The steel industry has been continuously demanding banning of iron ore exports,arguing that the existing reserve of 25 billion tonnes was likely to be exhausted within the next 20-30 years after which the country would become a net importer of the mineral to fire its blast furnaces. Even steel minister Veerbhadra Singh had written to the finance minister Pranab Mukherjee,pointing out that export of the mineral has surged in the first seven months of 2009-10 by more than 20 per cent over the same period last year and there was a pressing need to “heavily disincentivise exports of iron ore” not only to conserve it for the domestic steel industry but also to curb its illegal mining. At the steel ministry’s behest,the government hiked the export duty on ore lumps to 15 per cent,while leaving the duty on ore fines untouched.

The mines ministry has steadfastly maintained that this was a policy matter “as exports of minerals is regulated by the export-import policy of the government through the Ministry of Commerce and Industry.” The Cabinet did consider this vexed issue in the National Mineral Policy in March 2008. “The policy enunciates that conservation of minerals shall not be construed in the restrictive sense of abstinence from consumption or preservation for use in the distant future but as positive concept leading to augmentation of reserve base through improvement in the mining methods,beneficiation and utilisation of low grade ore and rejects and recovery of associated minerals,” a ministry official said. The mines ministry has argued that the draft legislation provides for reservation of area for the purpose of conservation of minerals and it should adequately cover any such concerns,whereby grant of mineral concessions be totally denied in such areas for a pre-defined period.

The law ministry has also suggested that apart from the rights for confiscation and disposal of the materials seized in illegal mining,transportation or other illegal mining activities,“ a sentence of imprisonment be made compulsory and officers abetting such mining be punished”. But the mines ministry has already incorporated penalty and disqualification clauses in the Bill,which it says are stringent.

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