Government mulls allowing FDI in mineral exploration

June 22nd, 2009 - 5:33 pm ICT by IANS  

New Delhi, June 22 (IANS) The government will place the new national mining policy in parliament by the winter session which would allow foreign direct investment (FDI) in the exploration of capital-intensive minerals like copper, nickel and chromium, Minister for Mines B.K. Handique said Monday.
Releasing the 100-day agenda for his ministry, Handique told reporters: “Mines and Minerals (Development and Regulation) Act, 1957 has been amended many times. There is an urgent need to amend the Act again to give more boost to the sector.”

He added that foreign investment would be allowed in mining only after the amendment in the Act.

Handique said his ministry was finalising a draft legislation in consultation with state governments and other stakeholders and would place it in parliament by the winter session.

S. Vijay Kumar, additional secretary in the ministry of mines, said exploration of minerals like copper, zinc, nickel and chromium was going very slow as it requires huge investments.

“The government encourages private participation. Many companies from Australia and Canada and the US have expressed willingness in exploration and extraction of these minerals,” Kumar told IANS.

“But they are a bit apprehensive now and want to go ahead with their plans only after necessary changes are made in the Mines Act,” he added.

The Geological Survey of India (GSI) has already been asked to put out all survey and exploration data, maps and reports on its website to facilitate private sector participation in mineral exploration.

The government is also looking at rationalising the royalty system on minerals.

Earlier there was a proposal to increase the royalty rates for minerals, but the government deferred a decision on the matter till September.

This was done to prevent higher royalty rates affecting mineral prices which would trigger inflation further.

The changes are expected to nearly double the mineral-rich states’ royalty earnings to Rs.4,000 crore annually. The state governments are desperate for revision of royalty rates as they were last revised four years ago and their revision was due last year.

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