Cabinet approves new mineral exploration policy

New Delhi: The Cabinet has approved the National Mineral Exploration Policy (NMEP) on Wednesday, which will pave the way for auction of 100 prospective mineral blocks, boosting India’s mining potential.

Through the new policy, the government is expecting to attract private sector in exploration, besides involving state-run Geological Survey of India (GSI), Mineral Exploration Corporation (MECL) and other notified agencies.

According to NMEP, selection of private explorer is proposed to be done through a transparent process of competitive bidding through e-auction. For this, reasonable mineral blocks for regional exploration will be identified by state governments for auctioning.

Once the explorer submits the data after exploration, the state government will auction the mining lease for that block. The mining lease owner will then pay certain royalty to the state government. The NMEP states that an amount equivalent to certain percentage of this royalty should be paid to the private explorer by the mining lease owner.

The revenue-sharing could be either in the form of a lumpsum or an annuity to be paid throughout the period of mining lease, with transferable rights.

To encourage mineral exploration in the country, the mines ministry has already notified the National Mineral Exploration Trust (NMET). The mining lease owners have started paying an amount — equivalent to 2% of the royalty paid to state governments — to this trust.

The states are also expected to play a greater role by referring exploration projects, which can be taken up through NMET. Of India’s entire Obvious Geological Potential (OGP) area, identified by GSI, only 10% has been explored and mining is taking place in 1.5-2% of this area.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.