September 06, 2008

New mining policy to be debate in parliament

It is reported that India’s new mining policy, which was approved by the federal cabinet last week, is likely to be debated in parliament, followed by a legislative amendment to existing mining laws.

Indian government hopes to lure foreign and domestic investment in domestic mining sector. It also aims to shorten the time it takes for mining leases to be granted to about six months to a year, a process that can currently drag on for years.

Under the new guidelines, foreign and domestic firms should find it easier to invest in the exploration and mining of gold, diamonds and metals like copper and zinc, and prospecting companies will automatically obtain a mining license. Only 10% of India's land mass has been explored for its mineral wealth and industry officials feel that this is largely due to the mass of paper work involved.

The policy document said that "Prospecting and mining shall be recognized as independent activities with transferability of concessions playing a key role in mineral sector development." It added that while state firms would continue to work on exploration and survey of minerals, the government would in future give more encouragement to private sector investment. The policy also said that it would encourage exports of value added minerals.

But the policy is reported to be silent on demands from mineral rich states on royalty payments. The policy document outlines that "The revenues from minerals will be rationalized to ensure that the mineral bearing states get a fair share of the value of minerals extracted from their grounds."