At the
annual general meeting of Federation of Indian Mineral Industries (FIMI),
Sanjay Pattnaik, Executive Director of Tata Sponge Iron (TSIL), was elected as
the national president of the body.
An excerpt
from his interview in the meeting:
What are the challenges before the industry?
Mining
involves numerous stakeholders, and hence, its revival depends on strong
coordination not only between miners and the government, but also among the
state and central governments.
Foremost of
all, the annual cap of 30 MT imposed by the Supreme Court needs to be removed
to allow the industry to grow.
India has
the highest tax rates on minerals in the world. Effective tax-rate, the ratio
of value of all amounts paid to the government to value of profits before
taxes, is approximately 69% for operating mines in India compared to
resource-rich nations like Canada (34%), Australia (40%), and South Africa
(40%).
In addition
to royalty, miners have to make several other payments such as DMF (30% on royalty
for existing mines and 10% on royalty for auctioned mines), NMET-National
Mineral Exploration Trust (2% on royalty), service tax (15% on royalty), sales
tax, environment and forest levies, and other cess/taxes by local institutions,
panchayats, etc.
These taxes
make the domestic raw materials costly and unviable for manufacturing, leading
to imports and reduced GDP from mining.
In another
interview with the beach mining tycoon, Vaikundarajan, the MD and CEO of the
largest beach mining company in India - V. V. Minerals, he had echoed the same
thoughts. Obviously, even the beach and sand mining companies face the same
issues with the policies of the government.
