The new National Steel Policy draft has proposed the allocation of captive iron ore mines to producers through open bidding and putting some mines in a general category for all bidders. The draft has projected India's iron ore requirement to increase to 392 MT by 2025-26, from around 200 MT at present.
The new policy draft seeks to replace the existing one that was formulated in 2005 and suggest ways to create an environment conducive for the growth of the industry that is weighed down by the issues like land acquisition and raw material scarcity.
Recognizing lack of raw material security, as a major constraint in increasing steel capacity, the draft said 'lack of raw material security has been one of the major causes for tardy progress of steel capacity expansion. The government will consider to further strengthen the provisions of allocation of captive iron mines to steel producers in a transparent manner through a process of open bidding for all the well prospected mines'.
Further, to ensure the raw material security, it has recommended restricting the exports and has also warned that the country may have to import iron ore in large quantities in the future at the forecast rate of growth of the steel industry. Given the possibility of early exhaustion of iron ore, the government will constitute an inter-ministerial committee to draw a road map or phased reduction of iron ore exports to a moderate level, the draft said.
The draft also added that while holding a general policy to discourage iron ore exports, the government will actively engage itself in granting iron ore mining concessions in an absolutely transparent manner to draw adequate investment into the area and to ensure that there is sufficient mining capacity to feed the growing demand for iron ore within the country.
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