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Now, private firms allowed to dig for mineral blocks
NEW DELHI: The Cabinet on Wednesday cleared a new mineral exploration policy, allowing private companies to carry out exploration for the first time.
NEW DELHI: The Cabinet on Wednesday cleared a new mineral exploration policy, allowing private companies to carry out exploration for the first time.
The National Mineral Exploration Policy (NMEP) will pave the way for auction of 100 prospective mineral blocks, boosting the country’s mining potential.
To encourage mineral exploration in the country, the mines ministry has already notified the National Mineral Exploration Trust (NMET).
Mining and metal stocks, including Ashapura Minechem, Sandur Manganese , Indian Metals, Maithan Alloys and Vedanta, rose up to 9% on the Bombay Stock Exchange (BSE) on Wednesday following the Cabinet’s decision .
“The NMEP will encourage private sector investment” finance minister Arun Jaitley said after the Cabinet meeting
“There has not been adequate exploration of minerals in India. It is important to attract private investment in mineral exploration,” steel and mines minister Narendra Singh Tomar said.
According to the NMEP, private companies engaged in carrying out regional and detailed exploration would get a certain share in revenue (by way of royalty or premium accruing to the state government) in mining operation from the successful bidder after the e-auction of the mineral block.
The revenue-sharing could be either in the form of a one-time payment or an annuity, to be paid throughout the period of mining lease with transferable rights.
The selection of the private explorer is proposed to be done through a transparent process of competitive bidding through e-auction. For this, reasonable areas or blocks for regional exploration will be earmarked or identified by the government for auction.
Of India’s entire obvious geological potential (OGP) area identified by the Geological Survey of India, only 10% has been explored, while mining work happens in 1.5% to 2% of the total area. The government is keen to get private firms to start exploring for more minerals, such as, diamonds and gold, where current mining is negligible, as part of Prime Minister Narendra Modi’s ambition to make India a major mineral producer.
