The Centre’s ambitious plans for the mining sector hit a roadblock after the mining ministry and the mineral-rich states failed to reach a consensus on certain clauses of the proposed Mines and Minerals Development and Regulation (MMDR) Act. While Andhra Pradesh and Orissa are demanding the continuation of their powers to reserve the iron-ore bearing areas for the PSU, the mines ministry has turned down the plea arguing that it negated the concept of a level-playing field.

During the course of a recent high-level meeting between the top brass of the mines ministry and states, top officials from the two states categorically demanded unbridled powers to reserve the ore-bearing areas for the PSUs. But the ministry said the reservation for PSUs, in the context of full transferability of concession and auction of ore bodies prospected at the public expense, did not fit the bill.

Mines ministry Additional Secretary S Vijay Kumar, who chaired the meeting, conceded that there was a need to ensure a level-playing field, but argued that it could lead to a distortion of the market, if PSUs get mining lease of captive mines without paying an auction price.

Another issue where the states and the ministry have hit a deadlock is on the issue of granting the Large Area Prospecting Licences (LAPLs). In the proposed Act, the ministry has proposed giving LAPLs on 5,000 square kilometres area. Arguing in unison, representatives from Andhra Pradesh, Chhattisgarh, Madhya Pradesh and Orissa termed it ‘unfair’ as it could lead to monopolisation.

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