With exploration emerging as a key constraint in the swift auctions of mineral blocks, the Geological Survey of India (GSI) will provide geological reports to states in respect of 18 blocks by December this year.
Additionally, GSI is also expected to offer reports on 13 more blocks by December next year. The mineral blocks readied by GSI contain deposits of copper, gold, manganese, iron ore limestone and bauxite.
At present, two central sector agencies -- GSI and Mineral Exploration Corporation Ltd (MECL) -- are predominantly engaged in mineral exploration activities. Though the state directorates of mining & geology are tasked with exploration work, they haven't taken off in a big way, being hamstrung by lack of manpower or financial resources or both.
The Union mines ministry is currently strengthening the exploration capacities of GSI, MECL and other entities notified for exploratory activities. The ministry has also urged state governments to invigorate their exploration arms.
Though Rs 10.48 billion has been collected as on July end under NMET, the fund utilisation remains slow. Only 62 projects have been sanctioned. NMET is a non-profit body set up by the Government of India to finance exploration projects. As per statute, every mine leaseholder has to contribute to the NMET an amount equalling two per cent of the royalty.
When compared with global exploration standards, Indian exploration scenario offers a grim picture. The quality of the geological database and its ease of accessibility do not stand up well as against other resource-rich nations. More, the country’s exploration spends pales into insignificance when compared with the leading mine rich nations. Our exploration expenditure is estimated at $17 per square km, a puny amount compared with $124 in Australia and $118 of Canada, the countries with the highest mineral exploration budgets.
Besides, India has only eight agencies tasked with exploration work compared with over 400 in Australia and Canada. Despite the government’s opening up mining for 100 per cent FDI (foreign direct investment), the sector accounts for measly 0.8 share of the total FDI attracted by the country.
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To deepen the scale of mineral exploration, the government has promulgated the National Mineral Exploration Policy (NMEP) 2016. The policy aims at bringing private parties on board for exploration over and above the state-owned agencies such as GSI and MECL.
States have hitherto auctioned 50 mineral blocks with a value of resources estimated at Rs 2.2 trillion. The auctioned blocks are projected to generate revenue worth Rs 1.81 trillion over the 50-year lease period.