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The Centre has proposed to give state governments the power to restrict licences for bauxite, limestone and iron-ore mines to end-users, but is reluctant to give a similar condition for manganese mines.
In the recent mineral auction rules, which have been made according to the provisions of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (MMDRA Act), the Centre has proposed to empower state governments to reserve the end-use of these categories of mines, according to their necessity.
Bauxite, iron ore and limestone mines can be reserved for alumina, integrated steel and cement plants, respectively.
As manganese has been kept out of its purview, steel companies, the major consumers of manganese, have questioned this proposal to reserve manganese mines specifically for ferro-alloy plants.
Manganese is added to molten steel to remove oxygen and sulphur and is alloyed with steel to make it easier to form and work with and to increase steel's strength and resistance to impact.
According to MOIL Limited, India's largest manganese producer, most of the manganese produced in the country is used in the steel industry.
"It doesn't make sense to only reserve end-use of iron ore mines only. The government must understand that manganese is as important as iron ore," said an Odisha-based steelmaker.
Kameswara Rao, leader (energy, utilities and mining) at PricewaterhouseCoopers said, "There is greater merit in focusing on production than end-use."
The state governments are likely to use their powers to reserve end-use for iron-ore mines auction in order to safeguard the steel industry from deep-pocketed merchant miners.
The draft mineral auction rules says: "The state government may in its discretion identify a specific end use", as a prerequisite for auction of mining leases. However, much to the disappointment of steelmakers, no such proposition of reserving the end-use has been made in the case of composite licence auction.
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- [Editor:Sophie]
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