A group of ministers (GoM) that met to discuss ways to overhaul India’s antiquated mineral and mining policy and decide on the contentious issue of iron-ore exports from the country didn’t make any headway, but agreed to meet again.
Ore exporters want to be allowed to continue to trade in the commodity, but domestic steel makers say exports should be regulated or banned completely so as to feed their own plants with ore.
In future meetings, the group plans to look at whether steel makers should be given their own mines and also try and arrive at a policy on mining leases. Both issues are critical: several firms, both Indian and foreign, that have been seeking to make significant investments in the steel sector, have been hobbled by the lack of ore.
The group is headed by Union home minister Shivraj Patil, and includes steel minister Ram Vilas Paswan, coal minister Sis Ram Ola, commerce and industry minister Kamal Nath and power minister Sushil Kumar Shinde.
“It turned out to be an exploratory meeting where members wanted to understand various proposals made by the ministry of mines,” said a senior government official aware of the developments in the meeting. He did not want to be identified.
The national mineral policy has a bearing on the steel and power sectors; iron ore and coal, respectively, are critical inputs for the two industries.
The official said the mining ministry made an elaborate presentation to the ministers. Its recommendations, added the official, were generally in line with those made by the committee that drafted the mining policy; that committee was headed by Anwarul Hoda, a member of the Planning Commission.
“There were so many issues that it was not possible to arrive at a conclusion in the first meeting. But the discussions went in a positive direction,” said another senior government official close to the development.
The GoM decided to tackle the export of iron ore in a separate meeting. Steel and mining companies are divided on the issue, with the former saying that if all of India’s iron ore goes outside the country, little will be left for steel makers and investors.
The mining sector favours exporting surplus iron ore, after domestic consumption is met.
The two groups also differ on whether steel makers should be given their own mines—another issue the GoM will take up separately and attempt to reach compromise.
The Hoda committee recommended that steel companies that were in existence in July 2006 should be given captive mines.
It also said that companies must process iron ore (or use it to make steel) within the borders of the state where it originated.
While the ministry of mines insists on sticking by the Hoda committee’s recommendations, the steel ministry wants to allow the movement of ore across borders.