The economic times reports that the new mineral policy has been announced. Excerpts are mentioned in another post. Here, we list it’s salient features.

  • The GoM has accepted the views of the mining industry while recommending no changes in the guidelines for exports.[This decision supports POSCO’s case for captive mines]
  • More powers provided to state government. The state governments will be able to give preference to companies undertaking value addition within the state while allotting iron ore mines. This will reduce standalone mines.
  • The policy will provide captive mines to all steel units in operation up to July 2006.[I’m not sure about it’s implications for POSCO]
  • The policy will now aim towards procedural simplification for attracting investments in the sector.
  • It will also benefit the states as under the new policy, the present system of specific rate royalty will shift to ad valorem rate of 7.5%.[This will have great benefits for Orissa and other mineral rich states]. Once notified, the proposal will increase royalty earnings by almost six times.
  • The states sitting over mining applications of companies will be penalised as delays will transfer their powers to the Centre.
  • Another important aspect of the new policy is that a process of competitive bidding can be initiated for allocation of captive coal blocks. This is presently done by a screening committee within the coal ministry. The bidding process will also be started for all other major minerals.
  • Besides, the government will auction mining areas where full prospecting has to be done.
  • Companies will have to earmark 3% of turnover for undertaking rehabilitation and resettlement of displaced people under a sustainable development model. However, the ministry of environment and forests will work out fresh guidelines separately to introduce environment-friendly mining practices in the industry.

The economic times states that mining areas will be auctioned for prospecting but the Telegraph says that Auctions mean global giants such as Posco and ArcelorMittal will not be allowed to negotiate for leases with Jharkhand and Orissa on the basis of plans for units in these states. Of course, this statement is speculative. But the states need to be careful before agreeing to this proposal.

Perhaps, We will have to wait and watch for the final notification on the policy.