December 03, 2008

New mining policy to support steel investments in non iron ore rich states

The new mineral policy has removed the pre requisite of value addition within the state for companies applying for an iron ore mining lease and the move will benefit those steel companies that purchase raw material from the open market.

As per reports, the cabinet note on the national mineral policy stated that India is a single economic region and therefore any company cannot be denied a mining lease by a state government only because it proposes to set up a plant outside that particular state. The cabinet note also spelt a preference for value addition while allotting an iron ore mine and allows standalone mining only in a case where there is no application for value addition.

But the implementation of the policy is quite uncertain at the moment as recommendation for grant of a mining lease has to come from the state government.