KOLKATA (miningweekly.com) – The Indian mining industry has squarely blamed the country’s present mining policy and the adoption of mandatory auction for the allocation of mineral assets as the cause of the country not featuring in the Fraser Institute’s global survey gauging investment attractiveness.
“The current mining policy has put India out of the list of attractive destinations for investment in mining,” Federation of Indian Mineral Industries (FIMI) secretary general R K Sharma said this week.
“At one time, almost all junior and senior mining companies in the world were in India following the 1999 amendments to the Mines and Minerals (Development and Regulation) Act (MMDRA) 1957. Today following amendments to MMDRA in 2015, these companies have moved out of India because of the auction policy adopted in the country since January 2015,” Sharma said.
Canada-based Fraser Institute conducts annual survey across 2 400 exploration, development and other mining-related companies to arrive at an investment attractiveness index, and treats it as a ‘report card’ to government on attractiveness of their respective mining policies.
India does not feature in the 2019 survey for the third consecutive year, with Indian miners claiming it to be a reflection of the current policies acting as a deterrent to growth of the industry in the country.
“The result of the survey, in which India does not even figure will result in the country being deprived of state-of-the-art technology and investment capital particularly in deep-seated minerals for which India is heavily import dependent. In fact Indian capital is going overseas creating assets and jobs in other countries,” Sharma said.
India also does not figure in the Fraser Institute’s survey's policy perception index (PPI).
According to the Fraser Institute, the PPI recognises the fact that investment decisions are often not based on the pure mineral potential of the jurisdiction and respondents of the survey have consistently indicated that about 40% of their investment decision is determined by policy factors.
Significantly, India does not even figure in the bottom ten countries ranked in the survey which included Argentina, Guatemala, Dominican Republic, Zambia, Venezuela, the Democratic Republic of Congo, Mali and Nicaragua, which FIMI maintained was a severe indictment of mining policies in India.
FIMI blamed implementation of legislation and rules in the mining sector, frequent production bans and restrictions for several foreign mining majors and juniors leaving the country.
The apex representative body of Indian miners holds that the mandatory imposition of auction as a route for allocating mineral assets to developers and mining companies is the primary reason for India falling out of the map of foreign investment destinations as such a method for allocation of assets is not prevalent in any country in the world, while best practice suggests a first-come-first-serve basis trumps auction, which was abandoned by India in 2015.