Steel sector staring at a crisis

New Delhi: The steel sector may face a crisis-like situation as the licences of more than 300 non-captive iron ore mines are expiring on 31 March next year. The crisis situation may develop following the amendment in the Mines and Minerals (Development and Regulation) (MMDR) Act, 1957, in January 2015, which provided for auction as the sole mode of granting concessions for a fixed period of 50 years to private companies—captive and non-captive. So far, the auctions have not started. Even if the auctions start now, the actual mineral extraction would take about three years or more, given the delays in obtaining statutory approvals. According to industry body Assocham, this may result in the government losing revenue of around Rs 80,000 crore from Odisha alone.

According to the Federation of Indian Mineral Industries (FIMI), government companies—both Central and state—are allowed an extension of existing leases for a period of 20 years at a time beyond the stipulated period of 50 years. However, this is not the case with the private sector. The Federation fears that this disparity will lead to a crisis-like situation and litigation.

In a representation to the Niti Aayog, FIMI has demanded for immediate extension of leases of these non-captive mines until March 2030. The Niti Aayog has set up a high-level committee on mines, minerals and coal sectors to identify key challenges and the ways to overcome them.

“Till Amendment Act, 2015, there was no distinction between captive, non-captive and government companies. They were at par in all respects, including tenure of leases. Mining—public or private, captive or non-captive—is one and should be taken as such in the MMDR Act,” the FIMI representation has stressed.

“It will be necessary to extend the period of existing non-captive leases till 31 March 2030 as is available for captive mines so that there is no disruption of raw material supplies. Thereafter, the lease period should be extended for 20 years at a time till reserves last,” it said.

Of the 329 non-captive mines in Andhra Pradesh, Goa, Gujarat, Himachal Pradesh, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha and Rajasthan, 101 mines can be auctioned, according to figures of the Ministry of Mines.