National Mineral Policy 2006 - Department of Mines
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National Mineral Policy 2006 - Department of Mines

National Mineral Policy 2006 - Department of Mines National Mineral Policy 2006 - Department of Mines

planningcommission.gov.in
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12.07.2015 Views

7.22 The current law does not make investment in industry based on the mineral anecessary condition for grant of a ML, nor does it mandate any outright preference to begiven to metal producers. It does, however, envisage that investment in industry based on themineral should be one of the factors influencing the decision to grant a ML in favour of aparticular applicant when one among multiple applicants is to be selected. Thus, in theframework of the current law it is possible to grant MLs for captive mines provided theapplicant separately fulfils the condition of special knowledge or experience of operationsconnected with mining, as laid down in Section 11(3)(a) of the MMDR Act. The scheme ofthe MMDR separately envisages that a RP/PL applicant would get priority when a PL/ML isto be granted in the applicant’s area and that if an area is not notified by the state governmentinviting applications for concessions then the first-in-time principle is to be followed. It isafter an area is notified that all applications are to be treated as equal, and in such cases,Section 11(3)(d) of the MMDR Act lays down that among the factors that a state governmentshould consider before granting a lease would be ‘…the investment which the applicantproposes to make in the mines and in the industry based on the minerals’.7.23 The MMDR Act does not rule out captive mining and such mining, while notdominant, is a reality in the country. Table 7.3 shows the production figures separately forpublic and private sectors and of captive and non-captive mines. It can be seen that of thetotal estimated production of 143 million tonnes in 2004–05, about 25 per cent was fromcaptive mines. In the public sector, the percentage of captive mine production was 39 per centwhereas in the private sector it was about 15 per cent. For the year 2003–04, thecorresponding figures were 27 per cent, 41 per cent, and 15 per cent respectively. Thus, morethan 75 per cent of the iron ore mining industry is in the non-captive segment.148

SectorTable 7.3: Iron Ore Production by Sectors: Captive vs. Non-captive(million tonnes)2002–03 2003–04 2004–05 (p)PublicSectorPrivateSectorCaptive20.45(41.16)9.53(19.30)Total 29.98(30.26)Noncaptive29.24(58.84)39.85(80.70)69.09(69.74)49.69(100)49.38(100)99.07(100)23.43(40.72)10.06(15.41)33.49(27.26)Total Captive NoncaptiveTotal Captive NoncaptiveNote: p: provisional figures; Figures in parenthes es indicate the percentage contribution of captive and noncaptiveby public and private sectors respectively in the total production.Source: Indian Bureau of Mines, Nagpur.34.11(59.28)55.24(84.59)89.35(72.74)57.54(100)65.30(100)122.84(100)22.30(39.01)12.74(14.89)35.04(24.55)34.87(60.99)72.80(85.11)107.67(75.45)Total57.17(100)85.54(100)142.71(100)7.24 For taking a view on whether it would be appropriate for the mining policy and lawsto allocate MLs exclusively for captive mining, the Committee found it necessary to examinethe position of iron ore resources in the country and also to look closely at the benefits ofstand alone mining. It is also necessary to look at the possible impact on the SME sector if achange in the policy were to be effected. Finally, it is necessary to consider whether captivemining of iron ore is essential for the viability of the steel industry and whether such miningenables the steel industry to contribute more to the GDP through the multiplier effect andvalue addition than it would if there were no captive mining. We deal with these issuesbelow.IRON ORE RESOURCES7.25 Five per cent of the earth’s crust contains iron. Geological surveys have surmised thatthough deposits of iron ore exist in more than 58 countries, 70 per cent of the world’s hugeiron ore resources are distributed in about eight large pockets, some of which are in thenorthern hemisphere and some in the southern hemisphere. The northern hemispherecomprising China, Russia–Kazakhstan–Ukraine, Sweden, and USA–Canada have ageological setting which is different from the southern Gondwanaland setting, comprisingAustralia, India, Southern Africa, and Brazil. The main differentiating feature between thetwo is that much of the iron ore in the southern hemisphere is superior grade haemetite withiron (Fe) content of 62 per cent or more. With the exception of Sweden, the northern iron ore149

SectorTable 7.3: Iron Ore Production by Sectors: Captive vs. Non-captive(million tonnes)2002–03 2003–04 2004–05 (p)PublicSectorPrivateSectorCaptive20.45(41.16)9.53(19.30)Total 29.98(30.26)Noncaptive29.24(58.84)39.85(80.70)69.09(69.74)49.69(100)49.38(100)99.07(100)23.43(40.72)10.06(15.41)33.49(27.26)Total Captive NoncaptiveTotal Captive NoncaptiveNote: p: provisional figures; Figures in parenthes es indicate the percentage contribution <strong>of</strong> captive and noncaptiveby public and private sectors respectively in the total production.Source: Indian Bureau <strong>of</strong> <strong>Mines</strong>, Nagpur.34.11(59.28)55.24(84.59)89.35(72.74)57.54(100)65.30(100)122.84(100)22.30(39.01)12.74(14.89)35.04(24.55)34.87(60.99)72.80(85.11)107.67(75.45)Total57.17(100)85.54(100)142.71(100)7.24 For taking a view on whether it would be appropriate for the mining policy and lawsto allocate MLs exclusively for captive mining, the Committee found it necessary to examinethe position <strong>of</strong> iron ore resources in the country and also to look closely at the benefits <strong>of</strong>stand alone mining. It is also necessary to look at the possible impact on the SME sector if achange in the policy were to be effected. Finally, it is necessary to consider whether captivemining <strong>of</strong> iron ore is essential for the viability <strong>of</strong> the steel industry and whether such miningenables the steel industry to contribute more to the GDP through the multiplier effect andvalue addition than it would if there were no captive mining. We deal with these issuesbelow.IRON ORE RESOURCES7.25 Five per cent <strong>of</strong> the earth’s crust contains iron. Geological surveys have surmised thatthough deposits <strong>of</strong> iron ore exist in more than 58 countries, 70 per cent <strong>of</strong> the world’s hugeiron ore resources are distributed in about eight large pockets, some <strong>of</strong> which are in thenorthern hemisphere and some in the southern hemisphere. The northern hemispherecomprising China, Russia–Kazakhstan–Ukraine, Sweden, and USA–Canada have ageological setting which is different from the southern Gondwanaland setting, comprisingAustralia, India, Southern Africa, and Brazil. The main differentiating feature between thetwo is that much <strong>of</strong> the iron ore in the southern hemisphere is superior grade haemetite withiron (Fe) content <strong>of</strong> 62 per cent or more. With the exception <strong>of</strong> Sweden, the northern iron ore149

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