NEW DELHI: The report of the Committee on Mineral Policy released here on Friday has suggested adopting an open sky policy for Reconnaisance Permit (RP) and sweeping changes in the Mines and Minerals (Development and Regulation) Act (MMDRA) to make seamless transition possible from one system of permit to another.

The committee, headed by Planning Commission Member Anwar Huda, has suggested structural changes in the existing policy with a view to bringing in larger investments in exploration and exploitation of mines and augmenting state resources.

Curtailing Govt. powers

It has suggested the elimination or substantial curtailment of the wide powers of Government, particularly discretionary powers, which affect the security of tenure of RP, mining lease, prospecting licence and large area prospecting licence (LAPL).

The committee was appointed by Prime Minister Manmohan Singh and is intended to serve as an important input for the new mineral policy on the anvil.

Addressing a press conference here on Friday, Mr. Huda said the committee had recommended that rates of royalty should be fixed on the basis of ad valorem rather than the existing practice of specific duties, and the reference rate could be that prevailing in Western Australia, viz, 11.5 per cent. The present rate of specific duties is 2.5 per cent.

It says each State Government should set up a mineral development fund by earmarking 15 per cent of its annual royalty collections.

The Centre should make a matching contribution for the duration of the Eleventh Plan (2007-11).

Regarding value addition, the committee has taken the view that where the mineral rich States receive multiple applications, they should be entitled to give preference to applicants who offer to set up an industry in the State based on that mineral. However, where no applicant has made a proposal for setting up an industry the applications should not be held up.

Suggesting an open sky policy for RP, Mr. Huda said this would help maximise investment for this permit. In other words, RP should be non-exclusive. Exclusive rights would start only at the next stage when the RP holder submits the necessary data required to get the PL. The Committee has recommended that the concept of LAPL should be introduced, whereby the holder is entitled to undertake prospecting work over a large area.

The committee has suggested that the grant of mineral licence should be done after following transparent auction or bidding procedures.

However, State governments may waive the auction procedure for promoting the establishment of industry within the State based on the mineral.

On the issue of captive mining the committee felt that captive iron ore mines should be renewed if they have complied with the conditions of the lease and the life of the steel plant so warrants. The steel capacities that are already in existence as on July 1, 2006, which do not have captive mines, should be given preferencial allocation of iron ore mines fully prospected by public agencies, without the need for going through the auction procedures, as a one-time measure to create a level-playing field.

The report also suggested that export of higher grade iron ore above Fe content of 65 per cent should attract export duty and the present system of canalisation and export licensing should be discontinued.

He said the committee members were of the view that llmenite, rutile and leucoxene had been delisted as prescribed substance by the Department of Atomic Energy as a result they would go out of Part B of the first schedule of the MMDR Act. However, in view of the potential of titanium dioxide to become a metal of the future, these are being regarded as mineral of national importance and placed on Part C of the schedule. — UNI

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