Under the draft national mineral policy, the planned set of incentives for private investment are likely to be more beneficial to companies providing ancillary services in the mining space, mainly start-ups from abroad, than core mining companies.
The draft policy is yet to be finalised.
“Companies engaged in the preliminary stages of mineral exploration stand to benefit the most from the financial incentives proposed,” said Kameswara Rao, leader — energy utilities and mining — at PwC.
He said companies that can provide data repository on the potential exploration sites, do aerial surveys and collate the data to be sold to potential investors will benefit from the policy. So, too, with consultancy assignments on policy structure sharing and monetisation of the resources.
Research identification and information on probable mining and exploration sites can be sold in the market. “There are many Australian and Canadian firms already involved in such activities,” Rao added.
Australia-based start-ups Vayeron, FDP Mining, XDR, Quick Safety and Artemis Intelligent Robotic Systems are some of these. According to Australian media reports, mining technology or tech start-ups are on the rise, especially across Queensland, the state which hosts mining potential.
According to a former Union mines secretary, core mining companies like Rio Tinto and DeBeers might not be able to gain, mainly due to absence of a clear policy on exploration.
In March 2016, the Union Cabinet approved amending the Mines and Minerals (Development and Regulation) Act to allow transfer of captive mining leases issued prior to January 12, 2015, in the case of mergers and acquisitions. However, under the National Mineral Exploration Policy of 2016, private agencies would be engaged to carry out exploration with the right to a certain share in the revenue (by way of royalty/premium to be accruing to the state government) from the successful bidder of a mineral block after e-auction, which would be discovered by that private explorer.
The revenue sharing could be in the form of a lump sum or an annuity, to be paid through the period of mining lease, with transferable rights.
Beside encouraging private participation in exploration, the draft mineral policy talks about involving states for facilitation and regulation of such activity. Grant of clearances for commencement of operations shall be streamlined, with simpler and time-bound procedures. The country’s exclusive economic zone should be explored and exploited, the draft said.