PSU steel miners may get relief in profit-sharingprofit

Steel Minister Virbhadra Singh on Monday indicated that public sector companies, such as Steel Authority of India Ltd ( SAIL) and NMDC Ltd, may get some relief on the proposal for sharing 26 per cent profit with local people affected by mining projects.

The proposal forms part of the new draft mining Bill that the government is drawing up.

“ Some special consideration has to be given to public sector companies for the historic role being undertaken on social obligations in different parts of the country,” Singh said.

The minister, however, said that he was not in favour of complete exemption for public sector companies from the proposed profit- sharing norm.

Singh aired his views in response to a question on whether public sector undertakings ( PSUs) would be exempted from the mandatory profit- sharing norm. He was speaking on the sidelines of the inaugural session of International Federation of Consulting Engineers ( FIDIC).

A group of ministers ( GoM) headed by finance minister Pranab Mukherjee had reached a consensus last week to approve the draft mining Bill, which proposes that mining companies share 26 per cent of their net profit with the local people who are affected by the mining projects. Singh is also a member of the GoM. The ministry of mines is now giving the final touches to the draft bill, which will be taken up once again by the GoM in its next meeting. The Bill is likely to be introduced in Parliament during the forthcoming Winter Session.

The steel minister also said the government is not opposed to South Korean steel company Posco getting a majority stake in the proposed joint venture ( JV) with SAIL. “ In principle, we are not opposed to giving a majority stake to Posco in the JV for which we will be seeking a Cabinet approval in a couple of months,” the minister said.

SAIL and Posco are engaged in discussions to set up a 1.5- million tonnes per annum integrated plant in Bokaro to produce high grade steel from low- grade iron ore and non- coking coal using Posco’s patented FINEX technology.

The agreement is expected to be complete in the next two- three months, Singh added.

Steel ministry officials had earlier said that the plant, which will come up on a 2,500- acre plot within the premises of SAIL’s Bokaro plant, would require an investment of about Rs 12,000 crore.

While inaugurating the FIDIC 2010, Singh said, “ There is also a need to conserve our natural resources for the future. We should only export valueadded products and there should be a ban on iron ore exports.” He said engineers in the country should develop innovative and energy efficient metallurgical production procedures to meet the fast growing demands of finished steel, which is growing at the rate of nine to 10 per cent per annum.

“ Engineers have a major role to play to help enhance the production capacity to achieve a growth of about 16 per cent per annum,” he added.

He said currently the steel production in India is 73 million tonnes per annum and is likely to go up to 120 million tonnes by 2013.