RAIPUR | Jul 04, 2016: India will auction 100 prospective mineral blocks of 100 sq km area each by November this year, a move that will boost the country's mining potential.

The development comes after the government last week approved a new National Mineral Exploration Policy (NMEP), which will help in attracting more foreign direct investment in the mining sector.

"Geological Survey of India (GSI) has identified 100 blocks. SBI CAP is working on the auction modalities for these blocks and will submit its report in 2-3 months," Mines Minister Narendra Singh Tomar told reporters at the first national minerals & mining conclave here.

When asked about the time-frame of the auction, he said: "The process will start in the next 4-5 months."

Tomar said the NMEP is based on revenue share model to encourage private players and FDI. A sum of Rs 2,116 crore will be needed for its implementation, he added.

Stressing the need for private players to come forward, he said India has 8 lakh square km of possible mining area but only 9-10 per cent has been explored. There are two government agencies, GSI and MECL, for exploration but their capacity is limited.

NMEP proposes that private entities engaged to carry out regional and detailed exploration will get a certain share in revenue (by way of royalty/ premium to be accruing to state government) from mining operation from the successful bidder after e-auction of the mineral block.

The revenue-sharing could be either in the form of a lump sum or annuity, to be paid throughout the period of mining lease, with transferable rights. Selection of private explorer is proposed to be done through a transparent process of competitive bidding through e-auction.

He also urged the mining industry to allocate 10 per cent of their profits to mineral exploration, so that true potential of India's mineral resources can be harnessed.

For this, reasonable areas/ blocks for regional exploration will be earmarked/ identified by the government for auctioning.

On auction of mines, he said states have so far auctioned seven mines with mineral reserves worth about Rs 29,000 crore.

The revenue to accrue from these mines over the next 50 years will be more than Rs 13,000 crore.

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