New Delhi: The government on Thursday introduced in Parliament a new mining policy which it hopes will attract foreign and domestic investment, but the document made no mention of changes to royalty payments demanded by mineral-rich states.
The policy was approved by the Union cabinet last week after a delay of nearly two years as state and Central politicians wrangled over key details.
It is likely to be debated in Parliament, followed by an amendment to existing mining laws. It 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. But it skirted the issue of royalties.
“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,” the policy document said.
State governments have been demanding a switch from a flat rate on minerals to royalties based on their value, possibly eating into miners’ margins but handing local governments a lot more money for their natural assets.
Officials from New Delhi and the states are due to meet in about 10 days to try and hammer out an agreement on how royalties will be charged under the new policy.
Under the new guidelines, foreign and domestic firms should find it easier to invest in the exploration and mining of gold, diamonds and metals such as copper and zinc, and prospecting companies will automatically obtain a mining licence. Only 10% of the country’s land mass has been explored for its mineral wealth, and industry officials say this is largely due to the mass of paper work involved.
“Prospecting and mining shall be recognized as independent activities with transferability of concessions playing a key role in mineral sector development,” the document said.
Until now, overseas prospecting companies have avoided coming to India because they could not sell the data they mapped, and could only utilize the information if they mined themselves.
The policy 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.
“Foreign equity investment in joint ventures for exploration and mining promoted by Indian companies will be encouraged,” it said.
The policy also said that it would encourage exports of value-added minerals. India is a large exporter of iron ore, mainly to China.