Investment in mining: Foreign companies raise concern over regulation

By: |
Published: February 27, 2020 2:24:42 PM

However, the practice of selecting L1 or lowest bidder in any project is relevant not only for government departments but even for private firms.

The Downer Group was evaluating opportunities in India in operation of mines and acting as MDO, he said. (Representative image)The Downer Group was evaluating opportunities in India in operation of mines and acting as MDO, he said. (Representative image)

At a time when the Central government is looking for big-ticket investment in the mining sector and improving its productivity, the segment may face hurdles to attract foreign investors due to policy and regulatory issues, overseas mining companies’ officials said.

Even as the government has taken several policy measures to open up the sector, issues such as “liability burden” and the system of selecting lowest bidder (L1) for awarding contracts or projects are major concerns for the deployment of quality technology in any mining project, they observed. They said the Indian mining sector needs international technology for improving its productivity and achieving sustainable growth.

“The government has taken several positive policy measures but the factor like 100 per cent liability is a major concern as international technology solution providers are just partial stakeholders in any project. On the other hand, best services and technology may not be found at the cheapest cost,” Australian company Mineral Technologies regional manager Glen D’Costa told PTI in an interview.

He was here as a part of the Australia-India Business Exchange 2020 delegation. Explaining further, D’ Costa said the involvement of technology partners for any mining project is about 15 per cent but as per current regulations, the foreign collaborators need to bear 100 per cent liabilities of a project. “Australian companies in India are looking to create value by investing in systems and processes. This cannot be done always as the lowest bidder. The government needs to take a look at this,” D’ Costa said.

However, the practice of selecting L1 or lowest bidder in any project is relevant not only for government departments but even for private firms. The Downer Group was evaluating opportunities in India in operation of mines and acting as MDO, he said. Another mining software and services company, Mine Excellence managing director Amit Bhandari said there is reluctance in adopting technology in Indian mining which can minimise cost and reduce risks of accidents.

D’Costa said policy stability is also very important for attracting foreign investors. Last year, the mining of monazite mineral by the private entities was “abruptly prohibited”, which is a concern for foreign investors, they said. The government had said that it prohibited mining of atomic minerals by private entities and will grant operating rights to only state-run companies to “safeguard” strategic interest of the country. Atomic minerals zirconium, monazite and thorium are found in abundance along several beaches of the country.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1Facebook bans ads with false claims about new virus
2Damanis up stake in India Cements to 12%
3New kid on the block: iQOO debuts a 5G smartphone powered by Snapdragon 865