Steel min feels captive use must for steel cos bidding for mineral

Source: Steel min to send views to mines min on mineral auction

By Shreya Nandi

NEW DELHI: The steel ministry wants only steel makers with operational units to be allowed to bid in the upcoming mineral auction for iron ore, a government source told Cogencis.

The ministry would soon send its suggestions to the mines ministry regarding the draft rules–The Mineral (Auction) Rules, 2015.

The mines ministry had sought comments from the general public, the government, mining industry and state associations on the proposition regarding the mineral auction rules.

The suggestion, if implemented, could bring some relief to domestic steel makers, as merchant miners can be kept away from the same mining lease.

Currently, as a prerequisite for auction of mining lease, the state government decides the specific end-use for a particular block, according to the terms and conditions laid down in the draft mineral auction rules.

In addition, the steel ministry will also write to the mines ministry to increase the cap on mine’s mineral reserve from 1.25 times, as mentioned in the draft rules, the source said.

As stated in the draft, companies will not be eligible to participate in the auction if a mine’s mineral reserve exceeds 1.25 times their stated requirement over a time span of 50 years.

The Indian steel industry is grappling with the issue of cheap imports, subdued domestic demand, sustained fall in international steel prices and inadequate iron ore supply due to the Supreme Court ban on mining, which has put pressure on margins of most manufacturers.

The Mines and Mineral (Development and Regulation) Amendment Act, 2015 introduced auctioning of iron ore, bauxite, limestone, manganese and other minerals, putting an end to the almost 60-year-old system of allocating mining leases on a “first-come-first-serve” basis.

Auction of mines will pave the way for greater excavation of minerals, and also bring transparency in the sector mired in cases of illegal mining, such as in Odisha, Karnataka and Goa

-Cogencis

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