Opinion Why prospecting licences cannot be compared to the 2G case
The article titled Last word on first-in-time by P. Raghavan.
The article titled Last word on first-in-time by P. Raghavan (IE, December 7) is totally inaccurate and misleading in its entire tenor,but most glaringly on the following factual counts:
(i) to say that there is a move to revert from an auction system to a first-in-time system is inaccurate as the current MMDR Act 1957 ,in fact,does not provide for auction and in fact since 1957,the system is of notification of mineral areas and first-in-time for non-notified areas. This position has been upheld by the court in the case against POSCO in its prospecting licence application;
(ii) to equate 2G licence with prospecting licence is basically flawed,as prospecting licences are not income generating. As such even if they are auctioned for what may be discovered as mineable reserve,the actual income is generated only at the mining stage. Prospecting is a high-risk venture,with only a slim chance of a prospect becoming a mine. The telecom spectrum is actually akin to a mining lease,rather than a two- or three-year prospecting licence;
(iii) to compare tax benefits of prospecting licences with mining leases is not only inaccurate,it is meaningless,as there is no income generated from a prospecting licence;
(iv) to claim cornering of prospecting licences will take place is absurd,as these licences are valid for three years after which period a prospector has to apply for grant of mining lease in the prospected area,as the prospecting licence expires. If the prospector does not find a mineable reserve in the licence period ,his licence will amount to a fruitless expenditure;
(v It is totally wrong to say that the current status of mineral prospecting is buoyant and reassuring. To say that there are 94 proposals for prospecting licences and only 78 for mining leases is meaningless,because they are not comparable,in fact the first leads to the second. Even the figures are inaccurate since they reflect only the portion with regard to only 10 major minerals in the first schedule of the existing MMDR Act where prior approval of the Central government is necessary. The Hoda Committee Report of the Planning Commission,which clearly the writer is not familiar with,in fact states that prospecting in India is not at all developed,particularly for base and noble metals (copper,lead,zinc,gold etc) and that this is the major thrust required through the National Mineral Policy 2008.
(vi The writer is also probably unaware of the fact that prospecting for deep-seated non-bulk minerals (copper,lead,zinc,molybdenum,cobalt,chrome ore,Rare Earth Elements etc),in which the country is highly deficit is practically non-existent and most prospecting is for surfacial deposits of iron ore.
(vii The ministry disapproves of such uninformed propaganda which seeks to only stifle the nascent exploration activities in the country. Maybe the writer should have also known that the global spending in exploration for non-ferrous minerals is upwards of $12 billion per annum,while in India it is a measly $5 million per annum,and the entire exploration industry is of the view that Indias potential for minerals is actually yet to be explored through the induction of high-technology and venture capital.
Naginder Kishor,Media and Communication Officer,
Ministry of Mines
Share
