NEW DELHI | Jan 04, 2016: The government is identifying large tracts of land to be given to private companies for detailed exploration of minerals. Mines Secretary Balvinder Kumar told ET that the ministry is in the process of identifying at least 50 potential blocks of 100 sq km and above to be given to companies for bringing private investment in the mineral exploration sector.

The blocks will be given to private firms once the national mineral exploration policy is finalised. The ministry has completed consultation with the stakeholders and is in the process of finalising the policy, he said. The policy aims to boost private investment in mineral exploration by incentivising private firms.

The blocks will be awarded in the three models proposed in the national mineral exploration policy for attracting private sector participation in exploration — revenue share from mining lease proceeds for 50 years, JV between private and public sector firms and reimbursement of costs with reasonable profits.

Private sector participation is required in exploration as India has been able to carry out only 10% regional exploration while countries like Australia, which have similar geological endowment, have completed 100% of regional exploration.

The mineral exploration policy aims to replace the earlier method of awarding reconnaissance permits by the government to private firms for preliminary prospecting of a mineral through regional, aerial, geophysical or geochemical surveys and geological mapping.

The method, however, failed given that of the 401 reconnaissance permits issued during the 14-year period since 2001, only about 15 converted to prospecting licences.

The government also plans to tap Rs 450-500 crore revenue in the National Mineral Exploration Trust that seeks to enhance exploration activities. The amended Mines and Mineral Development Act mandates firms to contribute 2% royalty for facilitating exploration.

(Source: http://economictimes.indiatimes.com/)