Centres sweeping iron ore proposal draws states ire

In a meeting with finance minister Pranab Mukherjee earlier this week,Singh expressed serious concern on behalf of the mineral-rich states on the proposed clause to grant Prospecting Licences (Pls) and LAPLs directly to the first-in-time applicant,with no exceptions while arguing that it totally disregarded the relative merits of the mining lease applicants. He pointed out that implementing the clause implied ruling out preference to value-adders over non value-adders. Such a sweeping rule never existed in the mining law before. It does not exist in any other law pertaining to allocation of any other national resource, he told the Finance Minister,who is heading the Group of Ministers (GoM) on the proposed MMDR Bill,2010.

Singh said granting LAPL/PL to a non value-adder shall deprive the states of the opportunity to generating investment and creating employment. Grant of LAPL/PL to a non value-adder,when a value-adder is also available,shall invite criticism of the government and discontent amongst the locals,particularly in the mineral-bearing tribal and naxal-affected areas, he told Mukherjee. He reminded that the Hoda Committee constituted to suggest a mineral policy too had recommended that in non-notified cases,a value-adder be preferred over a non value-adder for granting of direct LAPL/PL.

Hitting out at Section 17 of the proposed legislation,which allows LAPL/PLs to be transferred,Singh said,our experience of the mineral-rich states has been that the first-in-time principle was open to abuse and leads to preemptive behaviour for getting premiums by becoming first applicants. This principle,with no exceptions would lead to trading in mineral concessions.

He pointed out that in India geological survey reports or data were not in public domain,which were known to a handful of people associated with geology organizations. Such people would benefit from the first applicant rule by using the inside information, the chief minister argued.