In a big boost to the steel sector, the government plans to allow integrated steel producers to divert a portion of iron ore from their captive mines for use by other joint venture entities.
Existing regulations don’t allow diversion of minerals from captive blocks for use by any entity other than the one that has been allotted the mine. Only recently, the mines ministry has permitted SAIL to sell a portion of iron ore from their captive mines in the open market to boost its revenue.
As per the new reform initiative proposed for mining, the Centre would permit steel producers to use an identified portion of iron ore from their captive mines allotted prior to the auction regime for use by any other of their entities or joint venture operations.
In case of a JV, the original lessee of the mine (the company that was originally allotted the captive mine) should at least hold 26 per cent equity.
The changes would benefit companies such as SAIL, Tata Steel, Vedanta Ltd and JSW Steel, all of whom have operational captive iron ore mines.
Public sector steel major SAIL has over two dozen iron ore mines in Jharkhand, Odisha and Chhattisgarh. Similarly, Tata Steel has also got several mines in all the three mineral rich states.