July 20, 2015 2:27:46 am
In a first, the Union mines ministry is zeroing on an “open sky” policy to promote mineral exploration by roping in private explorers and allowing seamless prospecting of minerals except the strategic ones. The ministry is likely to recommend issuance of exploration bonds to private players on the lines of infrastructure bonds.
The earlier mining law, which was amended in March this year mandates auctions as the sole route for granting mining concessions, but poor investment in mineral exploration continues to plague the sector resulting in the government’s over dependence on the state-run exploration firms like Geological Survey of India (GSI) and mineral exploration corporation limited (MECL).
There is a growing realisation within the ministry that unless exploration is promoted there would be few non-coal mining leases left for future auctions. Of the 199 leases identified for e-auctions, some may need further exploration, a ministry official said.
“The quantum of investment in exploration remains a concern for my ministry and we have aimed to increase it to the extent possible through private participation in a transparent manner. Though GSI and MECL are doing their best, yet the net area where mineralisation is possible will have to be ascertained,” mines minister Narendra Singh Tomar told The Indian Express last week. Tomar reasoned that while government agencies will continue to perform the tasks assigned to them, the private sector will be roped in for reconnaissance and exploration.
In the amended mining Act, the government has mandated creation of a non-profit body called national mineral exploration trust (NMET) to promote regional and detailed exploration. The holder of a mining lease or a prospecting licence-cum-mining lease would compulsorily pay to the NMET, a sum equivalent to 2 per cent of the royalty.
A top official of his ministry said adopting an open sky policy on this issue is a viable way to rope in more investment in the sector and extensive consultations with various stakeholders including industry bodies like the CII is being held currently.
Conscious that the open sky policy may not fructify without incentives, the 12th Plan Working Group of the ministry had recommended encouraging equity investment in joint ventures for exploration promoted by domestic firms and participation by ‘Junior ‘ exploration companies specialising in advanced geophysical methodologies.
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