Bangalore | Oct 01, 2015: In an effort to provide a push to mineral exploration and ensure additional resources for the user industries, the ministry of mines is planning to open up the exploration segment to both Indian private sector companies and foreign majors. The ministry is in the process of introducing a new mineral exploration policy, which will be announced very soon, a top ministry official said.

“We are finalising the new mineral exploration policy and will announce it within the next two months. We have received representation from the mining industry about allowing the private sector in new exploration of mining assets. The policy will address their concerns,” Balvinder Kumar, secretary, ministry of mines, told FE on the sidelines of an international mining conference in Bengaluru.

He said the ministry is actively thinking of allowing Indian private sector mining companies and overseas exploration firms to carry out new exploration in the country.

Admitting that the exploration of minerals requires huge amounts of money and that public sector companies lack both technology and financial resources, Kumar said the government intends to attract the private sector in exploration. Going forward, the ministry plans to spend at least R500 crore annually in exploration.

“The exploration spend in India is abysmally low. Despite having very good geological reserves and possesses vitally concerned minerals such as gold, copper, nickel, platinum group of minerals, among others, we are still dependent on their import, leading to substantial drain on foreign exchange,” said H Noor Ahmed, president, Federation of Indian Mineral Industries (FIMI).

In 2014, of $10.74 billion spent by about 3,300 private exploration companies globally, about 14% was spent in Canada, 12% in Australia and 6% in China. However, India finds no place in the exploration map despite having very good geological reserves, he said.

According to FIMI, airborne survey alone will cost an estimated R4,000 crore, much beyond the capacity of the National Mineral Exploration Trust (NMET), which was set up by the ministry recently following an amendment to MMDR Amendment Act, 2015.

Given the high odds and risk in exploration, the country needs an attractive exploration policy which will encourage private investment and expertise into the sector, Ahmed said.

“The early stage exploration activity is usually funded by the private mining companies in many developed countries. Ability to fund the exploration and latest technology is available with the private miners. We have already made a representation to the ministry to ease regulatory controls and allow the private sector in exploration,” said R K Sharma, secretary-general, FIMI.

(Source: http://www.financialexpress.com/)