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MinesMin against allotting captive mines to plants

Mines ministry has ruled out allotting captive mines to home-grown steel plants.

Written by Priyadarshi Siddhanta | New Delhi |
August 31, 2013 2:24:22 am

Rejecting steel industry’s demand for raw material security,the mines ministry has ruled out allotting captive mines to home-grown steel plants saying that “it amounted to an anti-competitive market practice.

”In a reply to a Cabinet note moved by the steel ministry highlighting various constraints of the domestic industry,the mines ministry has argued that captive mining has inherent limitations which does not incentivise complete utilisation of run-of-mine output.

“The ministry is of the opinion that grant of exclusive captive mines is not an optimum solution since it would amount to an anti-competitive practice,” it told the steel ministry.

Instead of allocating captive resources to steel firms,the government should also ponder on developing ultra mega mining projects,which would not only ensure zero waste mining but also complete utilisation of the mined output,the ministry contended. The steel industry continues to argue that out of an estimated iron ore reserve of little over 25 billion tonne,only 8 billion tonne is mineable as the rest of the ore buried under the Western Ghats have been rendered non-mineable due to an earlier Supreme Court order.

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Barring state-run SAIL and Tatas,other steel firms like JSW and Essar are struggling to contain their input costs.

The mines ministry has also ruled out the steel ministry’s proposal to reserve mineral-bearing areas for central PSUs engaged in steel making and mining businesses saying it goes against the spirit of a level playing field,which is essential if private investment is to be attracted to the country’s mining sector.

Considering that the exploration spend per square kilometre in India is one of the lowest among the major mining economies,barely at 0.3 per cent of the global spend,there is a pressing need to ensure a fair deal to all concerned stakeholders.

Mining sector has the potential to contribute up to Rs 11.25 lakh crore to the GDP and create up to 1.5 crore jobs by 2025,according to mines minister Dinsha Patel.

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