News Nation Logo

Cabinet clears new mineral exploration policy to boost sector

In A Bid To Attract Private Investments Including FDI Into The Business Of Mineral Exploration, The Cabinet Cleared A New National Mineral Exploration Policy, Paving The Way For Auction Of 100 Prospective Mineral Blocks.

PTI | Updated on: 30 Jun 2016, 10:02:07 AM

New Delhi :

In a bid to attract private investments including FDI into the business of mineral exploration, the Cabinet cleared a new National Mineral Exploration Policy, paving the way for auction of 100 prospective mineral blocks.

 “Cabinet today cleared NMEP. After the policy is approved, the government can auction 100 blocks that have been identified by Geological Survey of India (GSI) for exploration,” an official said.

Explaining the policy, Finance Minister Arun Jaitley said it is for creation of baseline geoscientific data as a public good for open dissemination free of charge.

“Government will carry out a National Aerogeophysical Program for acquiring state-of-the-art baseline data for targeting concealed mineral deposits,” he said.

He further said that a National Geoscientific Data Repository is proposed to be set up to collate all baseline and mineral exploration information generated by various central and state government agencies as well as mineral concession holders, and to maintain these on a geospatial database.

To encourage mineral exploration in the country, the Mines Ministry has already notified the National Mineral Exploration Trust (NMET).

Mines Minister Narendra Singh Tomar said the policy is based on revenue share model to encourage private players and FDI. A sum of Rs 2,116 crore will be needed for its implementation, he added.

Stressing the need for private players to come forward, he said India has 8 lakh square kms of possible mining area but only 10 per cent has been explored.

He said there are two government agencies, GSI and MECL, for exploration but their capacity is limited.

“Through NMEP, the government wants to attract private sector in exploration, besides involving state-run GSI, MECL and other notified agencies. States will also play a greater role by referring exploration projects, which can be taken up through NMET,” a state government official said earlier.

One of the important features in NMEP is the attractive provisions for private investment in the exploration sector, the official added.

NMEP proposes that private entities engaged to carry out regional and detailed exploration will get a certain share in revenue (by way of royalty/ premium to be accruing to state government) from mining operation from the successful bidder after e-auction of the mineral block.

The revenue-sharing could be either in the form of a lump sum or annuity, to be paid throughout the period of mining lease, with transferable rights.

Selection of private explorer is proposed to be done through a transparent process of competitive bidding through e-auction. For this, reasonable areas/ blocks for regional exploration will be earmarked/ identified by the government for auctioning.

Of India’s entire Obvious Geological Potential (OGP) area, identified by GSI, only 10 per cent has been explored and mining is taking place in 1.5-2 per cent of this area. 

For all the Latest India News, Download News Nation Android and iOS Mobile Apps.

First Published : 30 Jun 2016, 08:25:00 AM