Govt to auction iron ore bodies to woo investors

In major initiatives to attract risk investments in the mining sector, the government is planning to introduce auctioning of iron ore bodies fully prospected at public expense and also introduce the concept of Large Area Prospecting Licence. It also plans to set up an empowered-cum-coordination committee at the Centre and states to work as a pressure group for facilitating early grant of mineral concessions.

Pointing out that mineral exploration is risky and a capital-intensive venture entailing a long gestation period, Mines Secretary Shantanu Consul told national and international miners here that the country will have to invest huge money to reap benefits of a booming mining sector and enhance its reserve-to-resource ratio. “Indian spending on mineral exploration is around 0.5 per cent of the global expenditure whereas Canada and Australia account for 19 and 12 per cent respectively,” the secretary said. He said according to a report of Metals Economics Group, the global expenditure on mineral exploration was $10.5 billion last year while India spent a paltry sum of money. This, despite the fact that 100 per cent FDI has already been allowed in the mineral sector since 1993.

“…value of mineral production has touched approximately $23 billion in 2007-08. However, exploration and mining of base metal minerals and precious minerals ha not received high priority due to which the country is still imports these minerals to meet its requirement,” he argued. The Secretary said that the National Mineral Policy seeks to unbundle issues from prospecting to mining wherein a prospector may invest, find and sell data.

Story continues below this ad

“A clear distinction will be maintained between the state as a regulator and the state as a miner,” he said. Consul said another instrument to attract global investment in the Indian mining sector would be to introduce the concept of Large Area Prospecting Licences wherein prospectors would be allowed exclusivity of large areas upto 5,000 square kms for intensive exploration through risk investment.

Gainful Exploration

• National Mineral Policy seeks to unbundle issues from prospecting to mining wherein a prospector may invest, find and sell data

•Another instrument to attract global investment would be to introduce the concept of Large Area Prospecting Licences