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| Government plans fund to encourage ore prospecting |
| BS Reporter / Kolkata Nov 15, 2009, 00:46 IST |
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In an effort to make iron ore prospecting more attractive to private players, the steel ministry is mulling establishment of a venture capital (VC) fund to allay the risk that investors face while scouting for natural resources.
Although the ministry was in talks with financial institutions to provide a safety net for private companies entering prospecting, the corpus of the proposed fund and the timeline for its implementation were unclear, Steel Secretary Atul Chaturvedi said.
With the Geological Survey of India and state-owned mining bodies operating with limited funds, private investment in prospecting was critical, he said.
“Prospecting is a high-risk area as there is no guarantee that one will find the resource. Even if a resource is identified, there is no surety of getting a mining licence. Also, there are no immediate returns and there is a risk attached to the capital spent,” Chaturvedi said at an event organised by the Merchants’ Chamber of Commerce.
The proposed fund could work well with the possible amendment to the Mines and Minerals (Development and Regulation) Act, which is likely to enable a prospector to seamlessly convery a prospecting licence into a mining license to bring private investment in the mining and prospecting industry.
Meanwhile, Steel Minister Virbhadra Singh said export of iron ore from India should be regulated and instead the raw material should be diverted to the domestic steel sector.
“It is my opinion that resources of the country should be made available to industry here. While this will mean a change in policy, we should try to export value-added products and not ore. I want to put this up before the Cabinet,” he said.
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