Super regulator sought for clearing large steel and iron ore projects

According to Chaturvedi,the steel minister Virbhadra Singh has in a communication to the environment minister Jairam Ramesh suggested that the regulatory functions of the environment ministry be hived off into a separate body that would decide on any proposal within 40 days. Chaturvedi pointed to Centre’s predicament of being a mute spectator when mineral-rich states sit on pleas for new mining leases or renewal of existing ones.

Public sector steel company SAIL,for example,had to wait for 12 years for renewal of leases for its Chiria iron ore mines in Jharkhand. ArcelorMittal’s proposed steel projects in Jharkhand and Orissa and Posco’s project in Orissa are among those held up at multiple agencies for want of clearances.

Currently,there are as many as 32 stages of approval for projects that entail acquisition and use of large stretches of land,Chaturvedi said. Projects stuck in the complex regulatory system include steel and iron ore plants,mining of copper ore,bauxite and nickel,besides Special Economic Zones and port projects on the east coast. “If a state can’t decide on a project within a reasonable period of time,an alternative mechanism at the Centre should assume its role,” Chaturvedi said. The laws and regulations in this regard should be predictable and clearances should be time-bound,he said. The steel ministry also favours a common regulator for all natural resources other than petroleum,he said. Such a regulator can oversee the exploration,production and use of national resources like iron ore,coal and bauxite in keeping with national priorities. To attract investors,the security of tenure as wells as the right of transferability of various awards — reconnaissance permits,prospecting licences and mining leases — need to be protected. One doesn’t need to interpret that these awards,which under the Constitution have to be given “in consultation with” the states,should invariably be given with their “consent”,Chaturvedi said.

Commenting on the Japanese steel mills’ decision to accept the Brazilian giant Vale’s demand for a 90 per cent increase in iron ore price under a new system of quarterly contracts,Chaturvedi said the Japanese firms have an automatic hedge,thanks to their cross-holdings in Vale. But the development would jack up the cost of infrastructure projects in India when the country is investing heavily in the sector. The current price hike would necessitate another 15-20 per cent hike in steel prices in India,Chaturvedi said. Arguing against the quarterly price contract,he said,iron ore is not a spot commodity as it takes more than six months for the ore to be imported,procured and converted into steel.