The Hoda Committee report, a synopsis of which was released to media on Friday(Jun 29), does indeed conclude it is 'in the best interest of the country to provide space in the mining regime for both stand-alone as well as captive mines'. At first glance, that's the cause enough for steel makers to cheer. However, the real sting, which appears to have gone unnoticed is that the Committee has not accepted the argument of steel plants for exclusive allocation of mines to them on ground of limitation of resources.
The new policy seeks to safeguard this conclusion by including important riders in section 11(iii) of the Mines & Minerals (Development & Regulation) Act or MMDR. While even the current law gives weightage to value adders, three clauses - experience in mining, financial resources and technical staff - now have to be satisfied in the mining concession rules. The interpretation: Steel makers cannot apply for mining permits without partnering with a mining major as all the clauses receive equal weightage. So while the policy recommends, on the one hand, that steel units in existence as of July 1, 2006, be given preferential allocation of iron ore mines fully prospected by public agencies, without the need for going through the auction procedures, as a one-time measure to create a level playing field between them and steel plants that have captive mines, in reality, they are not eligible without mining experience.
This makes life difficult for Posco, Jindal, Essar, RINL and others. There are 234 prior applications for the iron ore mine that Posco is eying, and there are many value adders among them. States, which have known to take up to 10 years to process mining applications, are now subjected to a time frame within which they must process all three categories of mining permits. For Reconnaissance Permits, they get a four month window, for Prospecting Licences, 10 months and for Mining Leases, just 13 months to clear applications. The implication: They now must satisfy 'just-in-time' and other criteria and can no longer use the delay to favour unsuitable candidates. As reported by ToI on June 29, unbundling and seamless transfer is also an important part of the new mining and mineral policy.
related to this is the story of Mittal Steel investing in Orissa:
BARELY hours after L N Mittal announced his plans to also explore Orissa for his proposed 12 steel plants, confusion seems to have broken out over the mining issues in Jharkhand, the original location selected by Mittal Steel for its maiden investment in India. While Jharkhand mines minister Madhu Kora said that the state government had not received any application from the Mittal group for iron ore mine lease, power and land acquisition , senior officials of Mittal Steel said that there was no question of filing an application whe n the state had not even identified suitable iron ore mines for the project.
"We had requested the Jharkhand government for a letter of comfort over our requirement of iron ore mines. Though we are in continuous dialogue with the state government , the letter is yet to come to us. Unless the state identifies mines for us, how can the company formally apply for a mining lease," Mittal Steel's Jharkhand project CEO Sanak Misra said.
At his press conference on Friday, L N Mittal had also said that things were not moving quickly in Jharkhand and the company would initiate the project that provided better infrastructure and faster clearances . Jharkh a n d , h o w - ever, feels that the state was doing all in its capacity to see an early start of the Mittal project. "The pace of work could be judged only after the applications were given," Kora told a news agency in Ranchi, passing the buck on the steel maker for all the delays.
Asked whether Mittal's announcement of setting up a steel plant in neighbouring Orissa was a pressure tactic to expedite things in Jharkhand, Kora said: "If anyone comes with such intentions, then I can only tell that the outcome of the understanding between the two parties would not be good." "Greenfield projects have their own bottlenecks... The problem of displacement appears . The government is in the process of firming up a rehabilitation and resettlement policy that would help to speed up work on the Mittal project," he added.
