New Delhi: Domestic steel producers have asked the government to modify the Mines and Minerals Development and Regulation (MMDR) Act to accord priority in allocation of captive mines to utilities producing two million tonnes (mt) of steel annually.
“We have written to Prime Minister Manmohan Singh seeking his intervention in the modification of the MMDR Act to accord priority to steel utilities with 2mt capacity in allocation of captive mines,” an Indian Steel Alliance (ISA) official said. The procedure for allocating of captive mines need to be formulated and simplified.
Arguing that the current global trend was for backward integration by steel producers, he argued that steel producers were looking to increase iron ore holdings and it is this search which has attracted foreign direct investment from Posco and Arcelor Mittal to Orissa and Jharkhand.
“Despite poor infrastructure in these states, investors are coming forward to put up projects. If allotment of iron ore mines get delayed and remains uncertain, the projects may eventually not see the light of the day, the ISA told the Prime Minister, the official said.
“We suggested to the PM that unless iron ore exports are curbed, there will be an incentive for deliberate production of fines. In addition to the export duty, a quantitative limit should be levied at the level of exports of 2005-06 and it should be reduced coterminous with the increase in steel capacity,” the official said.
The ISA official said the steel industry has solicited the expertise of consultancy firm KPMG to study the mining policy of India and suggest optimal legal and operational ways of accessing and using iron ore in order to avoid litigation.
The steel industry is at the crossroads and its growth depends on the decisions taken by the government. Development of infrastructure will be an enabler as well as a driver of steel demand and hence fresh steel capacities need to come up to meet the country’s growing demand for steel, he said.
“The Indian steel sector seeks government intervention and requests that a policy framework be created to promote the growth of the steel industry in India as steel is the backbone of industry,” the official said.