Steel cos ask govt to modify MMDR
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 of steel annually.
By PTI |
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 of steel annually.
"We have written to Prime Minister Manmohan Singh seeking his intervention in modification of the MMDR Act to accord priority to steel utilities with two MT capacity in allocation of captive mines,” said an Indian Steel Alliance (ISA) official.
"The MMDR Act needs to be changed to specify that all steel projects of a capacity of at least two MT are eligible for captive mines irrespective of their location and existing iron ore leases with steel producers are renewed," he reasoned.
The procedure for allocating of captive mines need to be formulated and simplified. "Unless this is done, any allotment of mines to a party who is not a first applicant is likely to get embroiled in litigation and there will be no progress on the ground," the official pointed out.
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 FDI from Posco and Arcelor Mittal to Orissa and Jharkhand.
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"Despite poor infrastructure scenario 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 Prime Minister that unless iron ore exports were curbed through policy measures, 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 co-terminus with the increase in the steel capacity," the ISA 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 litigations.
The Indian steel industry is at the crossroads and its future direction and growth will depend 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.
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"The Indian steel sector seeks government intervention and request that a suitable policy framework be created to promote the growth of the steel industry in India as steel is the backbone of industry and plays a major part in the transformation of a developing economy to a developed economy, the ISA official said. Start a SIP with as low as ₹500 with ET Money App!
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