Mining Bill overlooks some promises, say steel companies

Steel sector capacities of more than 30 million tonnes that are either commissioned or under various stages of construction may not get captive mines under the draft mining Bill. 

According to the steel industry players, the central government had promised that every company that planned to set up a steel manufacturing unit before 2006 would be allotted captive iron ore and coking coal mines.

However, the recently cleared draft mining Bill, which will replace the Mines and Mineral Development and Regulation Act, 1957, does not talk about this provision at all.

Sheshagiri Rao, director - finance at country’s second-biggest steel manufacturer, JSW Steel, said, “Almost 25-30 million tonnes per annum of steel capacity that has come up in the country, has been on the basis of promised captive capacity. But now there is no mention of it in the draft mining Bill.”

He said allotment of the captive mines was recommended in 2004 and later accepted in the Huda Committee recommendations on mining policy in 2006.

On basis of this, the steel companies had committed crores of rupees in steel manufacturing capacity.

Besides that, Rao said there are several provisions which are ambiguous and create confusion among the steel companies.

One of the recommendations is that the government would now auction coal mines to companies looking at setting up power plants, cement plants or steel plants and would discontinue the process of allotment.

While the move was applauded by industry analysts and companies, the Bill has now proposed that mines for which applications for allotment are already pending will not be notified for auctioning process.

“Although the auctioning move is good and will bring in competitiveness, the problem is that almost all mines with proven reserves have pending applications. Therefore, no mines are actually left to be put up for auction,” he said.

He said the draft Bill also suggests that mining of bulk minerals, too, will not be notified for auctioning.

“This will affect the interests of steel and aluminium companies as iron ore and bauxite come under the category of bulk minerals,” he said.

Recently, steel companies and the steel ministry expressed their concern on one of the major proposals of the Bill which asks mining companies to share 26% of their profits with the people affected by their projects.