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December 03, 2008


NMP to promote small scale mining in India

BL reported that, with an outlook to prevent growth of illegal mining in India, union government is looking at promoting small scale mining of small deposits in a scientific and efficient manner through National Mineral Policy.

According to the cabinet note prepared by union mines ministry, in places where small deposits are not susceptible to viable mining, a cluster approach would be adopted by granting the deposits together as a single lease with a defined boundary.

A union mines ministry official said that "The small and isolated deposits are scattered all over India and often due to diseconomies of scale they can also lead to sub optimal mining and ecological disturbances. In order to reduce this, steps will be taken to promote small scale mining in a more scientific and efficient manner while safeguarding vital environmental and ecological imperatives."

The official said that "Efforts would also be made to grant such mineral concessions to consortia of small scale miners so that such clusters of small deposits will enable them to reap the benefits of economies of scale. Research organizations, including the National Mineral Processing Laboratories of the Indian Bureau of Mines, will be strengthened for development processes for beneficiation."

National Mineral Policy has also removed the pre requisite of value addition within the state for companies applying for an iron ore mining lease. This move is expected to benefit all the steel companies that purchase raw materials from the spot market.

The official further added that the industry is still not clear how the allotment of the iron ore mines would actually take place. Currently, the recommendations for grant of a mining lease come from the respective states where the block is located. He said "As per the policy, preference will be given for value addition while allotting an iron ore mine and will allocate a mine to a standalone mining company only in a situation where there is no application for value addition."