Centre moots strict norms for private and state JVs

In the wake of rising number of joint ventures between PSUs and private firms for mining, the Centre today said it is framing a stricter and transparent policy on such alliances and has sought state`s response to it.

Last Updated: Sep 15, 2010, 23:20 PM IST

New Delhi: In the wake of rising number of
joint ventures between PSUs and private firms for mining, the
Centre today said it is framing a stricter and transparent
policy on such alliances and has sought state`s response to it
by the next week.

The Ministry of Mines issued the draft guidelines for
tightening the disclosure norms, after a stern message by
Mines Minister BK Handique that private firms would not be
allowed to avail the concessions given to the state PSUs
through "backdoor" entry.

Many state PSUs have tied up with private firms to launch
their projects in absence of an independent mining lease.

Orissa Mineral Corporation (OMC) and Mysore Mineral Ltd
(MML) have tied up with with Vedanta Group firm, which
was denied permission to mine bauxite at Niyamgiri recently on
certain violations, and JSW Steel Ltd for mining, respectively.

"In the name of PSUs, no more back door entry will be
allowed. Yes, they (private companies) have made back door
entries," Handique told reporters here.

In the proposed guidelines, on which the states have to
give their comments by September 20, the Mines Ministry has
said that its approval would be necessary for handing out any
concessions to these JVs even though there is a provision for
the same in the MMDR Act. It asked states to exercise restrain
from forming such pacts "indiscriminately".

"An MoU for exploitation of a mineral resource at a
specific location in anticipation of a concession or
reservation will be deemed to be incompatible with the
principles of fair play," the Ministry said.

State governments, at present, taking advantage of the
existing MMDR Act provisions sign MoUs with private firms
under "special reason". The Centre will discuss the subject
with the state governments here on September 21 in a meeting.

There must be a clear policy and norms for allowing the
benefits under the special reasons. Disclosure on investment
size and technology etc should be given, it said.

Presently pacts under special reason give the MoU
applicant an unfair advantage in relation to other applicants
for the same area, it said and added, "it would contradict the
policy of first in time for non-notified areas (for mining) or
most meritorious for notified areas.

It said the pacts signed by the state governments "must
be in conformity with the State Mineral Policy and must be
entered into in a transparent manner and suitably notified in
the State Website."

The Mines Ministry is working to bring in transparency in
the sector through a new legislation which is likely to be
presented in the Winter Session of Parliament.

PTI