Huda Committee suggests sweeping changes in Mineral Policy

New Delhi, June 30 (UNI) The Report of the Committee on Mineral Policy released here today in its far reaching recommendations has suggested adopting an open sky policy for Reconnaisance permit and sweeping changes in the MMDR Act to make only seamless transition possible from one system of permit to another.

The Committee, headed by Planning Commission Member Anwar Huda, has suggested structural changes in the existing policy with a view to bringing in larger investments in exploration and exploitation of mines and augmenting state resources.

It has suggested the elimination or substantial curtailment of the wide powers of government, particularly the discretionary powers, which affect the security of tenure of Reconnaisance Permit(RP), Mining Lease, Prospecting License and Large Area Prospecting License (LAPL).

The Committee was appointed by Prime Minister Manmohan Singh and is intended to serve as an important input for the new Mineral Policy on the anvil.

Addressing a Press Conference here, Mr Huda said the Committee has recommended that the method of fixation of rates of royalty should be on the basis of ad volrem basis, rather than the existing practise of Specific duties, and the reference rate could be that prevailing in Western Australia of 11.5 per cent. The present rate of specific duties is 2.5 per cent.

It says each State Government should set up a mineral development fund by earmarking 15 per cent of the annual royalty collections for the fund. The Centre should also make a matching contribution to the mineral development fund of each state of an equal amount from the plan funds every year for the duration of the Eleventh Plan (2007-11).

Regrading Value Addition requirements, the Committee has taken the view that where the mineral rich states receive multiple applications they should be entitled to give preference to the applicants who offer to set up an industry in the State based on that mineral. However, where no applicants have made a proposal for setting up an industry these should not be held up in the expectation that in future an applicant might turn up.

The other suggestions of the Committee relate to-- Forest Conservation and Environment Protection, financing of Infrastructure needs, captive mining, iron ore exports, and beachs sand minerals.

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