Strongly opposing some of the recommendations made by an experts committee on mining, Karnataka on Monday urged the Centre to keep the national interest in mind before proceeding to draft the National Mineral Policy and amend the Mines and Minerals (Development and Regulation) Act, 1957.
Speaking at a meeting of chief ministers convened by Union Home Minister Shivraj Patil here, Chief Minister H D Kumaraswamy said several states were of the view that the suggestions of the high-level Anwarul Hoda committee seemed to be oriented towards favouring private mining enterprise. Patil is the chairman of the Group of Ministers (GoM) set up by the Prime Minister on the issue.
The CM added that the committee did not adequately recognise the importance of the value addition, both for revenue mobilisation and employment generation within the country, attempted to severely limit and curtail the power of the state government, put no limit on exports of critical minerals which would be required for country’s economic development and undermined the role of the state and Central PSUs, and encouraged the idea of making “quick buck” by select few as against looking at long-term national interests.
Kumaraswamy, who was accompanied by State PWD minister H D Revanna, said the unprecedented upsurge in international demand had led to a spurt in the price of iron ore.
“The rise in the price of iron ore and other minerals, and the lopsided policy and legislation in the mining sector resulted in a highly skewed distribution of wealth and in massive profiteering by a few individuals and entities at the cost of national interest.” The Chief Minister, who earlier attended a meeting consisting of his counterparts from Orissa, Jharkhand and Chattisgarh, said while some of the recommendations such as fixation of royalty on ad-valorem basis and infrastructural development were welcome, others issues have not been adequately addressed. These, according to him, were amendments pertaining to value addition, curbs on exports to put a check on short-term at the cost of long-term interest, and procedural changes with reference to size, tenure and criteria for grant of reconnaissance permits, prospecting licences and mining leases.
Elaborating, he said the annual production of iron ore in Karnataka was 40 million metric tonne whose value would be about Rs 8000 crore at the rate of Rs 2000 per tonne.
Nearly 75 per cent of this resource was being exported without any value addition. “On the other hand, if this 40 mmt was converted into steel, 25 mmt of steel worth Rs 67,500 crore could be produced.
“State gets a royalty of only Rs 80 crore on the material, whereas at the rate of four per cent VAT, the State and Centre would share Rs 10,800 crore by way of excise duty,” he pointed out.
