As the Union mines ministry prepares to amend the National Mineral Policy (NMP)-2008, industry stakeholders feel tapping the public-private partnership (PPP) model can help attract large-scale investments in mineral exploration.
India is one of the least explored countries in the world with an exploration spend of $15-20 million annually. This pales into insignificance with other resource-rich nations like Canada and Australia which invest above $900 million every year on exploration.
”Auctioning large mineral blocks can attract large-scale investments with latest technologies and techniques. As mineral exploration is a high-risk business, PPP model can be considered”, said an industry source.
Tax holidays can be considered for exploration and prospecting especially in remote areas. Also, the new policy needs to be aligned with the National Steel Policy announced by the Ministry of Steel. The committee formed to recast the policy can take an overview of other policies in which certain provisions like tax holidays and other concessions can be extended.
In its order on August 2, the Supreme Court disposing of a case of illegal mining in Odisha had directed the Union government to have a fresh look at almost the decade-old NMP especially on the areas of conservation and development.
Accordingly, the government has formed a committee headed by K Rajeswara Rao, additional secretary with the ministry of mines. The mandate of the committee is to review the present policy- the need for bringing in further transparency, balanced social and economic growth and sustainability of the mining industry. It will suggest recommendations for conservation and mineral development along with protection of the environment and measures to assess the carrying capacity of mining in states or regions.
“Unless there is adequate exploration, the country cannot develop mineral resources as the level of exploration reflects the level of resource development in any country. ” There are hardly any foreign companies presently undertaking exploration in the country and said that we also do not have the required levels of technology in exploration”, he said.
Unlike India where the taxpayers’ money is deployed for mineral exploration, developed countries like Australia, Canada, Chile, USA, Brazil and Argentina invite junior companies who have expertise in exploration and are willing to take the risks associated with exploration which is an unpredictable and highly risky venture. In these countries, the local governments allow the junior exploration companies to sell their data which allows them to defray the costs and losses incurred in exploration.
Sharma feels unless the statutory framework allows for a seamless transition from reconnaissance to prospecting and thereafter to mining coupled with the provisions of easy transferability of concessions the exploration in the country will not be successful.