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No open sale of iron ore fines

Central government has moved to clear any ambiguity that could be misused by captive mine owners to sell iron ore fines in the open market

The move comes after the Jharkhand High Court in February stayed the State from banning exports, but relaxed it later to allow a onetime domestic sale of iron ore fines from the captive mines of Usha Martin and Steel Authority of India.

The Centre's recent move is seen as an attempt to reinforce the implicit ban on sale of captive resources, simultaneously pushing owners of captive iron ore mines to invest in adding value to the ore, they own.

It has sought the Law Ministry's approval on the same.

The Jharkhand HC in February had held that the state wasn't empowered to issue such notifications under the existing Mines and Minerals (Development and Regulation) Act. It was the Centre that is empowered to amend or introduce rules and laws.

In August last year, when Mr Arjun Munda led government in Jharkhand allowed the two steelmakers to sell fines from the mines that were allotted to them for captive use, the political parties that formed the opposition had cried foul.

This was despite the state government direction that the onetime sale would only be allowed to local firms, with Jharkhand businesses given priority. The state government was accused of selling out. It even inspired an unusual silent protest by MLA in the Jharkhand assembly.

Senior Jharkhand Mines Department officials said the state had sought its legal department's view before it decided on the next course of action after the court order. The government had defended its action, pleading environmental hazard.

SAIL at its Gua mines in Jharkhand had for example piled up 196.50 lakh tones of fines. It has also put out tenders for their sale. "We have plans to put up a four million tonne pellet plant, but that will take a few years," a senior official said on conditions of anonymity. We only wanted to reduce this pile to minimise the environmental pollution."

Welcoming the move, the Secretary General of the Federation of Indian Mineral Industries said, "Allowing sale of fines would be a violation of the conditions under which the state was making a lease recommendation. It cannot be allowed."

According to an official in the Mines ministry, captive owners who have access to iron ore at a production cost of INR 600 per tonne to INR 800 a tonne can afford to set up a beneficiation plant to increase its ferrous content and pelletize fines for easy transport. Tata Steel has set up its pellet plant close to its steel plant in Jamshedpur

Another miner who was affected by the move, said that "Where will we get space as the Environment (and Forest) Ministry is reluctant to grant fresh forest land for mineral processing."