India Needs To Extend Mining Lease Term To Produce High-Quality Steel: Former Steel Secretary PK Misra
An extension of the existing 30-year lease for deep-earth mining may prompt steelmakers to make long-term investments, allowing them to produce better-quality alloy, according to former Steel Secretary PK Misra.
“If you give 30-year leases for mining, maybe that is not an incentive for deep-earth mining. Maybe you need a lease for longer period for that kind of investment. These are the things the government should pay attention to,” he said in a conversation with BloombergQuint. “Just extending the lease period to 90-99 years should be sufficient.”
The move, according to him, might even attract investments from larger international companies that have experience in deep-earth mining in their own countries.
Also, Misra said the industry needed stability from the government and a steady regulatory regime which gives companies a level-playing ground for about 100 years, so that they can make an informed decision.
He emphasised on the need to produce high-quality steel which commands better margins. “If we don’t produce high-quality steel, profitably is bound to suffer,” he said. Besides, India will require this high-quality steel for the imminent infrastructure growth. “We need to understand that India with its vast population, as it grows, will require far more infrastructure and high-quality infrastructure.”
This comes at a time domestic production of steel fell on declining private consumption and low investment growth amid a slowing economy. Domestic steel prices had hit a bottom in October before improving from November.
The government — in its last cabinet meeting — approved an amendment to the Mines & Minerals (Development & Regulation) Act, 2015, to allow swift transfer of statutory and environment clearances to winning bidders of iron ore mines whose leases are set to expire in March. These will be valid for two years to ensure continuity.
According to Misra, some of the measures by the government on the MMRDA to facilitate iron ore supply are “welcome”.
Watch | Former Steel Secretary PK Misra Talks About The Future Of Steel In India