This story is from June 26, 2006

Captive mines: Steel industry puts pressure

Shalini Singh / TNN / Jun 26, 2006, 23:54 IST

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Fears that the Hoda Committee report could deny steel makers captive iron ore mines is leading to intensified pressure from the steel industry.

Captive mines: Steel industry puts pressure

NEW DELHI: Widespread fears that the Hoda Committee report could deny steel makers captive iron ore mines is leading to intensified pressure from the steel industry, especially since its proposals will be finalised in a meeting scheduled for June 30.
The Hoda Committee believes FDI in steel can succeed just on the basis of growing domestic steel demand and savings on freight costs by locating steel plants near iron ore mines."Captive iron ore mines are simply not needed as an additional motivator to attract FDI in steel,"says a senior government source.
Indian Steel Alliance (ISA) has written to Montek Singh Ahluwalia, deputy chairman, Planning Commission, advising him not to regard mining sector's arguments against captive iron ore mining for the steel sector.
The Hoda Committee has been set up by plan panel under the leadership of Anwarul Hoda to give a new direction to the country's mining sector.

It acknowledges that allocation of captive mines to steel makers compromises the growth of the mining sector. This view is inviting stiff resistance from the steel lobby headed by Tata Steel and holding up the new mining and mineral policy.
The ISA has urged plan panel to focus on the tremendous value addition made by steel sector as a counter to the view that grant of captive mines involves a subsidy which steel makers do not pass on to the consumer.

In response, Federation of Indian Mineral Industries (Fimi) says that all steel units engage in value addition irrespective of whether they have captive mines or not.
"When miners sell ore to steel mills who do not have captive mines the same value is added as from steel mills who get their iron ore from captive mines.
So value addition and captive mining are different issues and cannot be confused with each other,"says RK Sharma, secretary general, Fimi.

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