Date | Nov 06, 2016:
Government has clarified that secondary steel producers as well as related industries such as sponge iron and pellet makers are also eligible for bidding for iron ore mines based on their end use.
Under the Mineral (Auction) Rules, 2015, on the indicative list of specified end use for allocation of iron ore mines, 'Integrated Steel Plants' (Schedule II) has been provided, which creates disadvantage for industries like sponge iron, pellet makers and small steel-making units, a source said.
In March 2015, the Mines and Minerals (Development and Regulation) Act was passed, which makes it mandatory for mine leases to be awarded only through auctions. The government then framed the Mineral (Auction) Rules, 2015 to conduct the auctions for major minerals except coal and atomic minerals.
"Actually, under these rules, the powers of the Centre are exercised by states for reservation of a particular mine for any particular end use and state governments can earmark certain percentage of mines for the end use," he explained.
"The steel ministry took up this issue with the mines ministry and said the term Integrated Steel Plants should be replaced with a neutral one Production of Iron and Steel and so, there is a need to amend the rules," he added.
The mines ministry has responded, saying the list given in Schedule II of the rules is "only indicative" in nature and is "not restrictive" to integrated steel plants, he said.
"They (the mines ministry) said states can reserve blocks for any end use like sponge iron, iron ore pellets, etc by using the end use mentioned in the Schedule II for iron ore," he added.
Confirming the development, a senior government official said the steel ministry in May itself had notified that no steel producer will be classified or certified as integrated steel, secondary steel, main or major producer by the ministry or the Joint Plant Committee.
Besides, the ministry also notified that such classifications or certifications stand withdrawn, the official added.
The development assumes importance as it will ensure a dedicated supply of raw materials to small steel manufacturers and related industries to produce products at competitive prices, a move that in the medium and long term will develop the potential of such units to export their products.
In March this year, government think-tank NITI Aayog pitched for shifting from the strategy of exporting iron ore to its value-added products in a bid to boost India's manufacturing potential.
The country's premier policy-making arm had stressed that extraction of minerals should benefit development of a robust value addition industry through strengthening of the manufacturing sector.
Developing a strong value-added product industry would support the manufacturing sector in the country, which would not only create jobs and bring in more foreign exchange, but give a boost to Make in India initiative, the Aayog had said.
(Source: http://www.business-standard.com/)