National Mineral Policy 2006 - Department of Mines

oad and rail, and lack of long-term planning by exporters are some of the factorsresponsible for the current situation where the per tonne landed cost at a Chinese portof India’s high grade ore is US$ 65 compared to US$ 62.90 for Brazilian ore and US$50. 99 for ore from Australia. Although India is much closer to China than Australiaor Brazil the freight cost from Australia is US$ 10 per tonne while from India it isUS$ 13 per tonne. [4.25]• The Rural Water Supply Scheme of the Central government could be extended to themining areas to meet the water supply requirement of the small- and medium-sizedmines. With reforms in the electricity sector, supply of electricity to the remote areaswill improve. The government should make a conscious decision to make electricityavailable to the mine sites also, especially for small- and medium-sized mines. [4.26]INFRASTRUCTURE FINANCING• Each state government with major mining activity should set up a MDF byearmarking 15 per cent of the annual royalty collections for the Fund. The GOI shouldalso make matching contribution to the MDF of each state of an equal amount fromthe Plan funds, every year for the duration of the Eleventh Plan. [4.28]INSTITUTIONAL FRAMEWORK• The mandate of the existing mineral corporations of the state governments should beenlarged so as to include development financing and promotion of mininginfrastructure projects and they should be renamed as Mineral InfrastructureDevelopment and Finance Corporations (MIDFICs). The Committee recommendsthat these institutions should become joint sector organisations with participation frommining companies, financial institutions, commercial banks, and NBFCs. MIDFICsshould promote implementing agencies in the form of JVs and SPVs. They will accessthe Viability Gap Funding Scheme of the GOI and the MDF of the state governmentconcerned. The longer term debt for financially viable projects would also beavailable for the purpose from IIFCL. [4.30, 4.31]210