India urged to reform mineral exploration policies
COAL & MINING

India urged to reform mineral exploration policies

Sumit Deb, the outgoing President of the Federation of Indian Mineral Industries (FIMI), has called for comprehensive reforms to stimulate mineral exploration in India. Speaking at the 57th annual session of FIMI, Deb expressed concerns about the potential lack of interest from international Junior Exploration Companies and domestic exploration firms in participating in the auctioning of exploration licenses under the proposed regulatory framework.

Deb highlighted reservations regarding the amended Mines and Minerals (Development and Regulation) Act, 2023, suggesting that it may not effectively achieve the objective of identifying and securing critical and deep-seated mineral resources essential for India's economic growth.

He emphasised the need to reassess the mineral concession policy and adopt a more favourable framework in alignment with international industry standards. The amended MMDR Act introduces the concept of exploration licenses (EL), which will be granted through auctions for conducting reconnaissance and prospecting for critical and deep-seated minerals.

Deb raised concerns about the proposed mechanism for granting exploration licenses, particularly the concept of reverse bidding, where bidders must specify the percentage revenue share payable by the successful lessee over a 50-year period. He argued that this approach does not align with international best practices observed in mineral-rich countries like Australia, Canada, and South Africa.

According to Deb, the current system lacks incentives for explorers and introduces uncertainty regarding returns on their significant investments. Additionally, even if exploration efforts are successful in identifying resources, the returns would be tied to a percentage of the premium paid by the successful lessee over five decades.

Deb also highlighted the shortcomings of the auction regime introduced for the grant of mineral concessions more than eight years ago. Despite the auctioning of numerous mineral blocks, the mechanism has not yielded the anticipated results in terms of expedited development and resource utilisation. Out of the 155 greenfield non-coal mineral blocks auctioned since the implementation of the MMDR Amendment Act in January 2015, only seven have progressed to the mine development or production stage. Furthermore, prospecting licenses have been issued for just three out of the 79 mineral blocks auctioned for composite licenses.

In summary, Sumit Deb's call for reforms underscores the importance of creating a more attractive and efficient environment for mineral exploration in India, ultimately contributing to the nation's resource security and economic development.

Sumit Deb, the outgoing President of the Federation of Indian Mineral Industries (FIMI), has called for comprehensive reforms to stimulate mineral exploration in India. Speaking at the 57th annual session of FIMI, Deb expressed concerns about the potential lack of interest from international Junior Exploration Companies and domestic exploration firms in participating in the auctioning of exploration licenses under the proposed regulatory framework.Deb highlighted reservations regarding the amended Mines and Minerals (Development and Regulation) Act, 2023, suggesting that it may not effectively achieve the objective of identifying and securing critical and deep-seated mineral resources essential for India's economic growth.He emphasised the need to reassess the mineral concession policy and adopt a more favourable framework in alignment with international industry standards. The amended MMDR Act introduces the concept of exploration licenses (EL), which will be granted through auctions for conducting reconnaissance and prospecting for critical and deep-seated minerals.Deb raised concerns about the proposed mechanism for granting exploration licenses, particularly the concept of reverse bidding, where bidders must specify the percentage revenue share payable by the successful lessee over a 50-year period. He argued that this approach does not align with international best practices observed in mineral-rich countries like Australia, Canada, and South Africa.According to Deb, the current system lacks incentives for explorers and introduces uncertainty regarding returns on their significant investments. Additionally, even if exploration efforts are successful in identifying resources, the returns would be tied to a percentage of the premium paid by the successful lessee over five decades.Deb also highlighted the shortcomings of the auction regime introduced for the grant of mineral concessions more than eight years ago. Despite the auctioning of numerous mineral blocks, the mechanism has not yielded the anticipated results in terms of expedited development and resource utilisation. Out of the 155 greenfield non-coal mineral blocks auctioned since the implementation of the MMDR Amendment Act in January 2015, only seven have progressed to the mine development or production stage. Furthermore, prospecting licenses have been issued for just three out of the 79 mineral blocks auctioned for composite licenses.In summary, Sumit Deb's call for reforms underscores the importance of creating a more attractive and efficient environment for mineral exploration in India, ultimately contributing to the nation's resource security and economic development.

Next Story
Real Estate

Pecan Realty Completes Rs 1.5 Billion Transactions

Pecan Realty has recently completed four institutional transactions worth over Rs 1.5 billion over the past two years, strengthening its position as an execution-led real estate platform. The deals include resolution-led acquisitions, structured finance transactions and capital partnerships across its development portfolio.The transactions covered acquisitions through the National Company Law Tribunal process and helped provide repayment or exits to both private and public sector lenders. The company said the deals demonstrate its ability to resolve complex project situations, work with instit..

Next Story
Real Estate

SNN Estates Expands North Bengaluru Housing Project

SNN Estates has announced an expansion of its SNN Estates Felicity residential project in North Bengaluru following strong buyer demand, with 75 per cent of the first-phase inventory sold within three days of launch.The developer will add 76 apartments in the new phase, taking the project's estimated revenue potential to around Rs 1,000 crore upon completion of Phase 2.Spread across 6.5 acres in Rachenahalli, near Manyata Tech Park, the project comprises 604 apartments in 1.5, 2, 2.5, 3 and 4 BHK configurations. The development includes a 50,000-sq-ft clubhouse with amenities such as sports co..

Next Story
Infrastructure Urban

SCG Drives ASEAN Industrial Transformation Strategy

SCG is strengthening its focus on ASEAN as a key growth region by advancing industrial transformation, enhancing competitiveness and building resilient regional value chains. Thammasak Sethaudom, President and Chief Executive Officer, SCG, highlighted the need for industries to continuously develop capabilities, strengthen resilience and deepen regional cooperation to achieve sustainable long-term growth.SCG views ASEAN as an important growth engine alongside China, supported by favourable demographics, trade connectivity and investment flows. With ASEAN’s GDP projected to grow by around 4.7..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement