KOLKATA (miningweekly.com) – The Indian government’s ostensible policy is to double mineral exploration every year with participation of domestic and foreign private players, but foreign participation in domestic non-coal mineral exploration is on a downtrend.
“We are preparing a document for increasing the participation of the private sector in mineral exploration and [will] even allocate money for certain sectors of private mineral exploration,” Mines Ministry joint secretary Bipul Pathak, said in a recent statement.
“In my opinion mineral exploration should double every year as there is a limit to what the government can do,” he said.
“To increase exploration the private sector has to come in and that is the only way. The government is trying every level of private participation, mineral majors and junior companies from all over the world to come to India,” Pathak said.
The official was referring to the Mines Ministry working on a new mineral policy expected to be unveiled within the next two months with a focus on mineral exploration by the private sector.
However, despite the optimism over policy initiatives, the reality is that during 2017/18, foreign direct investment (FDI) in the Indian mining industry fell to its lowest level in recent years at a mere $36-million down from a peak of $659-million touched in 2014/15.
The previous FDI low in mining industry was in 2013/14 when it hit $13-million.
As a share of total FDI inflow into the country, the mining sector accounted for just 0.8% of the total FDI during 2017/18 against a share of 2.06% in 2014/15, and an indication of unattractiveness of the domestic mining industry to overseas investors. This, even though 100% FDI is permitted by the government in all mineral exploration and mining except for atomic minerals and few other strategic minor minerals.
The proposed new mineral policy will aim to address issues like exploration companies not getting right of first refusal at the time of auctioning of a mineral block discovered by the exploration company, and a composite exploration and mining licence was expected to be put on offer under the new policy.
However, industry analysts said that measures like these were unlikely to address the key issues that kept global players away from investing in the country, such as taxation, which stood at 64% – the highest globally.