Mines min hopes to attract global biggies to exploration sector

The mines ministry hopes global biggies like Rio Tinto and others would take part in the country’s largely untapped exploration sector after rules under the newly-approved National Mineral Exploration Policy (NMEP) are notified in the next 2-3 months.

“We had consulted with major global players like Rio Tinto and DBRS before finalising the new policy. They are great names in the exploration space. We hope they will be interested in taking part in our exploration sector,” mines secretary Balvinder Kumar told FE on the sidelines of the first-ever national mining conclave here.

India’s mining exploration sector has been largely untapped with only 10% of the 8 lakh square km potentially resource-bearing area has been explored so far. Mining takes place on just 1% of the explored area.

Paving the way for private sector participation in the country’s largely-untapped non-coal, non-fuel mineral exploration sector, the government had last week cleared the NMEP with the hope of auctioning 100 blocks within the next 8-9 months in the first phase for carrying out exploration work.

The government would issue global tenders soon after it finalises the rules attracting the attention of the global exploration firms. Their participation, however, would largely depend upon the attractiveness of the revenue-sharing model provided in the NMEP.

According to the NMEP, the mines ministry will carry out auctioning of identified exploration blocks for exploration by private sector on revenue sharing basis in case their exploration leads to auctionable resources. The revenue, which could be a certain percentage of royalty given to the states or the sale value of the produced mineral, will be borne by the successful bidder of those auctionable blocks for the entire lease period, the mines ministry had said earlier.

“If the explorer agencies do not discover any auctionable resources, their exploration expenditure will be reimbursed on normative cost basis,” it says.

When the exploration work is over, states will take back the explored blocks from the explorer and put the explored blocks to auction among the potential end-users. Of the 100 blocks that would go for exploration in the first phase, 70 of them contain deep-seated minerals like gold and diamond.