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PPP model in mineral exploration can boost investments: Top Fimi official

India is one of the least explored countries in the world with an exploration spend of $15-20 million annually

Jayajit Dash  |  Bhubaneswar 

mining

As the Union mines ministry prepares to amend the National Mineral Policy (NMP)-2008, stakeholders feel tapping the public-private partnership (PPP) model can help attract large-scale investments in

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 is a high-risk business, can be considered”, said an 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 Policy announced by the Ministry of 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 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 It will suggest recommendations for conservation and mineral development along with protection of the environment and measures to assess the carrying capacity of in states or regions.

R K Sharma, secretary general of the (Fimi) feels the thrust should be on inviting foreign investment and technology in the sector. 

"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 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 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 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 coupled with the provisions of easy transferability of concessions the exploration in the country will not be successful.

First Published: Sun, September 17 2017. 13:18 IST
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