Some 14 years after opening the mining sector to private investment, the Union mining ministry awarded its first approval to a foreign-backed company seeking to tap an area in Uttarakhand, about 5km from the Nepal ­border.

Mineral exploration company Adi Gold Mining Pvt. Ltd has been waiting 12 years for this. Its struggle against red tape, along with India’s poor spending record on mineral exploration, was the subject of a front-page story in Mint on 21 September.

Long wait: A view of Askot, where Adi Gold is exploring for copper and zinc. The location is 5km from the border with Nepal

Days after the Mint story, Adi received approval, along with 17 domestic companies that also gained clearance to prospect in seven states. Adi Gold is the Indian subsidiary of Vancouver-based Pebble Creek Mining Ltd, and has been exploring for copper, zinc, gold and lead ore deposits in the country since 1996. It is listed on the Toronto Stock Exchange.

Adi conducted preliminary exploration work for copper and zinc in Askot in the Pithoragarh district. Government agencies also had carried out exploration activities with assistance from the United Nations Development Programme between 1965 and 1988. Satellite surveys conducted in the area show that the location has rich mineral deposits, said Puran Chandra Sharma, Uttarakhand’s principal secretary for industries and mines.

A mine developed in Askot represents great potential for the region, he said. “It will bring revenue in the form of royalty." Last year, the state earned around Rs70-80 crore from minerals.

In September, two steel companies—Bhushan Power & Steel Ltd and Jindal Steel & Power Ltd—received approvals to mine for iron ore in Jharkhand. Jindal Saw Ltd, which is also part of the $4 billion (Rs15,720 crore) Jindal group, has received mining approvals for gold, silver and copper ore in Rajasthan.

Despite securing a green signal from the Centre, the companies will now need forest department clearances before they can start excavating minerals.

“We are processing the applications that have received Centre’s approval, but it may take longer than the stipulated three months," said a senior mining official in Jharkhand, who didn’t want to be named.

Delays have resulted in foreign direct investment in the sector dropping from $18 million in 2004 to $3 million last year. Other requests continue to languish among office files or get caught in conflicts over licence rights due to loopholes in the mining act. The act is currently being amended.

Domestic companies don’t fare much better. After waiting for a decade, Hutti Gold Mines Ltd, the country’s single gold miner, received permission to mine in Karnataka’s Raichur district, 22km from its current mining area. “Preliminary investigations show that the area has 2.5 tonnes of gold. But the reserves will increase once we do detailed investigations," said M.L. Patil, Hutti Gold deputy general manager.

“We have been lethargic in joining this highway," says Shailendra Kumar, commodity research head at broking firm Sharekhan Ltd. “We have lost a lot of investments before. We will lose further if delays ­persist."