KOLKATA (miningweekly.com) – India’s Mines Ministry has unveiled the draft National Mineral Policy (NMP) 2018, which proposes to offer mineral exploration companies the right of first refusal at the auction of any area explored by them.
The draft NMP, which is now open for feedback from industry and stakeholders, maintains that a first right of refusal will incentivise global exploration majors to invest in exploration projects in the country.
The Mines Ministry has said that the NMP is open for suggestions on any additional incentives, as per globally accepted principles, that will enable global mining exploration and production majors to step up investments in the country.
The Ministry earlier proposed that, while exploration companies on completion of their project will be reimbursed for costs incurred, they will have to compete with other bidders at an auction to take their project forward.
However, in the course of consultations with international resource majors, including Rio Tinto and BHP Billiton, officials in the Mines Ministry veered round to the conclusion that a mere reimbursement of costs of high-risk exploration projects without a composite licence for development after exploration, will not attract investment by many companies.
Other exploration incentives on the cards include a fixed royalty payment for the entire period of a mining lease, in case the discovered mineral asset was secured at the auction for development by an entity other than the exploration company, or a one time down payment payable by the developer to the exploration agency.
The Ministry has set a deadline of February 9 for receiving all feedback on the draft NMP, following which a final version will be prepared.
“Steps will be taken to facilitate financing of mine development as exploration being an integrated part of it, exploration projects would be granted mining industry status,” the draft NMP states.
“At the same time, to ensure a high degree of enforcement of mining plans, the Indian Bureau of Mines and mining directorates at the state levels will be strengthened with adequate manpower and skillsets,” the draft says.
For an effective NMP to be put into place, the government will establish a mining tenement system, which will be fully automatic for the entire lifecycle of the tenement, involving a full information technology backbone, the Ministry said.