The Centre has decided to reserve for private explorers just 20 blocks out of a total 100 blocks to be allotted under the new mineral exploration policy, a senior mines ministry official said.
The remaining 80 blocks are to be allotted to government and public sector entities, with a time-bound target to complete the exploration within one year, the official, who did not wish to be identified, said. The ministry has cited a paucity of exploration firms in India for the low number of blocks kept aside for the private sector at this juncture.
“Of the 100 blocks where we want to initially start exploration under the new policy approved by the Cabinet in June, 20 blocks would be opened up for bidding by the private sector, since there isn’t a strong presence of explorers in the business yet,” the mines ministry official said.
Thirty blocks are to be allotted to the Mineral Exploration Corporation Ltd. (MECL) and the Geological Survey of India (GSI) each, while central public sector firms will be assigned 20 blocks for exploration purposes. MECL and GSI are under the administrative control of the mines ministry.
Untapped reserves
Despite large reserves of minerals including copper, bauxite and iron-ore, India’s progress on their exploration has been quite poor with just 10 per cent of a potential 8 lakh square kilometres being explored till date.
“We have decided that the complete exploration process must be concluded in these 80 blocks within one year,” the official added.
Under the policy, permits for exploration of non-hydrocarbon minerals are to be auctioned to private sector players on a revenue-sharing basis. The exploration rights would be awarded to the bidder seeking the minimum revenue-share if their exploration results in the discovery of `auctionable’ reserves.
Even though private players, including foreign investors, were already allowed to explore blocks for determining mineral reserves, the new Mines and Mineral (Development and Regulation) Act of 2015 necessitated a change in the system. Previously, a reconnaissance or exploration permit could be converted into a prospecting licence and mining lease if mineral reserves of viable scale were discovered.
Since the new mining law requires all blocks with identified mineral reserves to be auctioned instead of being allotted by an administrative mechanism, such conversion of a reconnaissance permit isn’t possible.
Private firms are cool to the new regime as there’s no guarantee explorers would get to exploit their discoveries, said another official.