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The District Mineral Fund, proposed by the Government in the new Mines and Minerals Development and Regulation Act, will push up costs not only for steel companies that have bid for new coal blocks but also majors such as Tata Steel and SAIL that have got their old lease renewed for 30 years.

 

Speaking on the sidelines of the ‘India Steel 2015,’ an industry event organised by FICCI, Narendra Singh Tomar, Minister for Steel and Mines, said the contribution to District Development Fund by companies whose captive mine licence were renewed would be equal to the royalty as against 33 per cent of royalty they were paying earlier.

 

On the other hand, he said, for companies that have won coal blocks through the auction, the DDF contribution would be one third of the royalty.

 

This apart, he said the royalty and contribution to DDF for minor minerals such as basalt, laterite stones, rubbles and river sand would be decided by the State governments. The Central Government has decided to auction 10 major mineral mines including coal, bauxite, iron ore, limestone and manganese ore.

 

Tomar said the Centre is considering the demand to hike steel import duty and a decision would be taken in the near future in consultation with the Finance and Commerce Ministries. By the virtue of MMDR Act, mining companies need not wait for getting environment clearance from Indian Bureau of Mines, but can start work after getting approvals at the state level. The industry should target to achieve production capacity of 300 million tonnes by 2025 while the Government is working hard to push demand by promoting the ‘Make in India’ concept.

 

Tough times

 

Rakesh Singh, Secretary, Ministry of Steel, said globally the steel industry is facing tough times with slow growth and significantly excess capacity with over 25 per cent of the capacity in Europe is surplus and China alone is reported to be having over 200 million tonnes of excess capacity.