[ferro-alloys.com] Indian Express reported that rejecting steel industry's demand for raw material security, the mines ministry has ruled out allotting captive mines to home grown steel plants saying that it amounted to an anti competitive market practice.

In a reply to a Cabinet note moved by the steel ministry highlighting various constraints of the domestic industry, the mines ministry has argued that captive mining has inherent limitations which do not incentivize complete utilization of run of mine output. The ministry is of the opinion that grants of exclusive captive mines is not an optimum solution since it would amount to an anti competitive practice.

Instead of allocating captive resources to steel firms, the government should also ponder on developing ultra mega mining projects which would not only ensure zero waste mining but also complete utilization of the mined output, the ministry contended. The steel industry continues to argue that out of an estimated iron ore reserve of little over 25 billion tonne, only 8 billion tonne is mineable as the rest of the ore buried under the Western Ghats have been rendered non mineable due to an earlier Supreme Court order.

The mines ministry has also ruled out the steel ministry's proposal to reserve mineral-bearing areas for central PSUs engaged in steel making and mining businesses saying it goes against the spirit of a level playing field, which is essential if private investment is to be attracted to the country's mining sector.

Considering that the exploration spend per square kilometer in India is one of the lowest among the major mining economies, barely at 0.3% of the global spend, there is a pressing need to ensure a fair deal to all concerned stakeholders.