National Mineral Policy 2006 - Department of Mines

communications and equity research. ASX also gives appropriate index support to the miningsector. This is done by refining industry classification to exclude non-mining companies fromthe index so that investors can take informed decisions.7.14 In the light of the above discussions, the Committee is of the opinion that the Ministryof Finance (Department of Economic Affairs) in consultation with SEBI and the major stockexchanges examine the possibility of providing a special dispensation for mining sectorcompanies on the lines of ASX, AIM, and TSX’s TVE so that investment in prospectingcompanies is encouraged. ASX-type assistance by way of improving investorcommunications, equity research, and appropriate index support to the mining sector wouldhelp attract private equity funds to this sector. The sectoral focus of private equity, includingventure capital, and the financial markets generally is at present on identified emerginggrowth sectors, viz. IT, ITeS, media, telecom, lately commercial real estate, etc. Withexcellent growth potential appearing on the horizon on account of the new miningdispensation it is imperative that the fund-raising environment for prospectors and minersmoves in step to bring about the growth of mining.ALLOCATION OF CAPTIVE MINES TO STEEL MAKERS7.15 Captive mining of iron ore refers to the allocation of iron ore mines to steel makersso that they can extract iron ore according to the needs of the steel unit and utilise the same insteel making without the intermediation of stand alone mining companies. There are fourclear interest groups in the debate on whether captive mining should receive priority in theallocation of iron ore mines vis-à-vis stand alone mines, viz. the steel mill owners withcaptive mines, steel mill owners without captive mines, stand alone mines, and the SMEsector.7.16 The first group is comprised of steel mill owners who already have captive mines withreserves enough to meet their requirements for 10–30 years or more. The Steel Authority ofIndia Limited (SAIL) and Tata Steel belong to this group. This group argues that iron orebodies should be reserved for steel makers because iron ore is a limited resource and theindigenous steel industry should have the benefit of iron ore at extraction cost rather than atmarket prices. The ‘limited resource’ theory is built primarily on the argument that theproven reserves of haematite iron ore, being very limited, will not last beyond 40–50 years,143