Mineral policy may skirt ore export ban

Mineral policy may skirt ore export ban

The much-awaited national mineral policy (NMP) is unlikely to address the contentious issue of banning iron ore exports.

“The issue of exports is not part of the NMP. It is a totally separate issue, which would be decided by the finance and commerce ministries, along with the Prime Minister’s Office," said T.Subbarami Reddy,minister of state for mines.

The issue was also raised by the chief ministers of five mineral-rich states during their meeting with Prime Minister Manmohan Singh on Wednesday. In their memorandum, the chief ministers said: “We strongly advocate that the export of minerals should be phased out since minerals are non-renewable and finite resources."

While the steel industry has demanded banning exports so that the minerals could be used for its expansion, the Anwar-ul-Hoda Committee, in its recommendations for the mineral policy, had favoured removing quantitative restrictions on overseas sales.

It had, however, said the issue could be reviewed after a period.

Reddy also said the ministry would consider the demand of mineral-rich states to bar foreign direct investment (FDI) in mining of iron ore, chromite and bauxite. “We have taken note of this issue and have assured them there concerns on the issue would be addressed," he said.

The chief ministers of Orissa, Rajasthan, Chhattisgarh, Jharkhand and Madhya Pradesh had opposed FDI in prospecting of iron ore, bauxite and chromite as a lot of local entrepreneurs are undertaking operations of these minerals.

Reddy also said the issue of passing on the cess collected from mining activities and constitution of a task force for finalizing the amendments to the applicable law would not be a part of the policy.

“We have told them that these issues will be looked into afterward as they are not part of the NMP."

The minister, however, said the states’ demand seeking compensation for the use of minerals through an automatic advalorem based royalty structure has been accepted.

“The states wanted the advalorem to be about 20%, but we have said that the percentage could be fixed after discussions between the representativesof the states and officials from the mines ministry," Reddy added.