Govt steps up support for miners in 13 countries amid geopolitical risks

The Ministry of Mines has appointed nodal officers in Indian embassies across 13 countries to assist the country’s mining stakeholders, as private companies investing in overseas critical-mineral assets seek greater diplomatic support and protection amid geopolitical risks.

 

The officers have been appointed in Argentina, Australia, Bolivia, Brazil, Chile, the Democratic Republic of the Congo, Mozambique, Peru, Russia, South Africa and Lesotho, Tanzania, Zambia and Zimbabwe, the ministry told Business Standard in response to a detailed questionnaire on measures to secure supplies from overseas assets.     

 

The ministry is also identifying potential critical-mineral investment opportunities across Latin America, Canada, Australia, Southeast Asia and Africa, in coordination with Indian missions abroad, investment bankers and project owners.

 

“Relevant information on such opportunities is shared with Khanij Bidesh India Ltd (KABIL), other public-sector undertakings (PSUs) and interested private companies for consideration and further action, as appropriate,” the ministry said.

 

The move assumes significance as the government has in recent months signalled its intention to support private-sector initiatives in overseas critical-mineral assets.

 

At an industry event last month, Union Mines Minister G Kishan Reddy said the ministry was working with the Ministry of External Affairs to “hand-hold” private entrepreneurs and mineral-industry partners seeking opportunities in mineral-rich countries. State-backed KABIL is tasked with identifying and acquiring critical-mineral assets overseas.

 

While the ministry has outlined measures to facilitate overseas exploration and investment, companies with overseas mining assets say government support could go further in helping them navigate the risks in foreign jurisdictions.

 

“The government should consider underwriting geopolitical risks associated with overseas critical-mineral investments, including the possibility of assets being nationalised by host countries,” said Rajat Verma, founder and chief executive officer of Lohum. The company has acquired 10 lithium mining blocks in Zimbabwe, where mining is already underway.

 

Verma said the government could participate in such investments as a first risk-taker or develop a mechanism to underwrite the risks. Such support, he added, would help the industry expand more rapidly.

 

Beyond diplomatic intervention, mining executives say Indian embassies could help companies address practical challenges in setting up overseas operations, including obtaining work permits and accessing local geological information.

 

“In Africa, especially after establishing companies, the work permits for skilled manpower that could take 15-30 days for Chinese companies could take three to six months for Indian companies,” said a senior executive of a mining company, requesting anonymity. His company holds mining assets spanning 96 square kilometres in Zambia, covering gold, copper and critical minerals, including nickel, cobalt and rare-earth elements.

 

He also cited delays and difficulties in accessing local geological data through Indian embassies in Africa. He said embassies and consulates could set up dedicated desks to provide geological data, connect companies with local geologists and guide them on surveys and other requirements for setting up mining operations.

 

“Such support would help companies assess investment opportunities and reduce the cost and complexity of entering unfamiliar markets,” he said.