Steel cos eye iron ore blocks

NEW DELHI: Captive blocks may no longer be the conceptual monopoly of coal ministry. As the steel sector prepares to grow, the industry wants the Centre to frame a policy for allocating captive iron ore blocks to steel producers along the lines of the coal ministry. This demand gains special importance at a time when the Hooda Committee is already reviewing the iron ore policy.

These demands, if met, may give some relief to steel majors like Vizag, Jindal, Essar and Mittal which have been denied iron ore blocks by state governments of Andhra Pradesh, Uttar Pradesh, Gujarat and Maharashtra, respectively. “Presently, states allow iron ore mining to certain companies at their discretion. However, there is a need for the central government to draft a policy guiding the allocation of captive mines to steel producers,” said Moosa Raza, president of the Indian Steel Alliance.

Currently, India has 13bn tonnes of recoverable iron ore. India’s steel production is expected to reach about 110m tonnes (MT) in ’20 from 35mt currently. And around 176 mt of iron ore will be required to increase steel output. Therefore, the steel industry is pushing for policy on captive mines to have a secure, hassle-free and non-discretionary availability of iron ore.

According to the mines and minerals (development and regulations) (MMDR) Act, the state government recommends to the Centre on mining leases to be allotted to applicants. The Central ministry approves or rejects the applications on the basis of criteria laid down in the MMDR Act.

Around a month ago, the mines ministry rejected at least 10 applications from leading steel producers like Tata Steel, Bhushan Steel, Jindal and Ispat Industries for iron ore mining leases in Orissa and Jharkhand.

Applications of even small players like Monet Ispat, Aarti Steel and Neepaz Metalliks had also been rejected. But the industry is now demanding a transparent policy to ease the screening of applications and allocation of captive blocks. Captive mining allows steel companies to mine iron ore for internal consumption and not for sale or export.