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Iron ore is not a strategic mineral - Indian mines ministry

Reports in the Indian news papers says that Mines ministry has shot down the steel ministry’s proposal that iron ore should be classified as a strategic mineral.

The reports came in a recent note to the Parliamentary Standing Committee on coal and steel.

The mines ministry argues that iron ore is available in abundance in the country and hence there is no pressing need for the classification. It added that 28.5 billion tonne of ore is available in India and its reserves are likely to go up with further exploration.

It has written to the parliamentary panel, currently scrutinizing the mining Bill that steel makers need to utilize the entire produce of ore to ensure its total conservation rather than clamouring for curbing its exports. Mines ministry has told the parliamentary panel that the steel ministry’s demand for allocating captive mines to state run units like NMDC is unacceptable as it runs counter to the spirit of a level playing field, which is essential if private investment, especially FDI, is to be attracted to India’s investment-starved mining sector.

The ministry pointed out that “There should be a level playing field between the private and public sectors and the government should adopt an arm’s length approach. It is essential to distinguish between the state’s role as a promotional explorer and a commercial miner.”

Mines ministry has also hit out at the steel industry for seeking captive mines to ensure raw material security.

The ministry acknowledged the concern on assured mineral supply but said that giving captive mines is not an optimum solution as it has inherent limitations as such mining generally leads to under utilization of the inferior grade of ores.

In the absence of adequate beneficiation and agglomeration capacities in the country, steel companies are unable to process and utilize the mineral.

Besides, there is also a need to focus on encouraging ultra mega mining projects by organizations like the National Mineral Development Corporation, which can ensure complete utilization of the entire ore produced.