India is planning to swiftly move forward with a process of offering nearly 500 mining blocks for various minerals to domestic and foreign investors, Pralhad Joshi, minister for coal and parliamentary affairs, said Tuesday.
The move comes as part of Prime Minister Narendra Modi’s vision of Atma Nirbhar Bharat, or self-reliant India.
This will be the second phase of reforms for the country’s mining sector, following a recent move to auction coal mines to private companies, breaking the monopoly of the state-run Coal India Limited that dominated the production of the fuel.
India is rich in various minerals including iron ore, bauxite and copper, but the mining potential has been tied down by red tape as well as concerns over environment as some of the minerals are located below forests.
Speaking at a seminar organised by the Federation of Indian Chambers of Commerce and Industry (FICCI), Joshi said that the blocks will be offered through an open and transparent process.
He also invited industry’s suggestion for taking forward the process of reforms. The government has prepared a policy development paper for the mining sector, which is currently being fine-tuned.
India’s mining sector contributes to around 2.5% of the GDP, falling far short of a government target of raising it to 5%.
Aruna Sharma, former mines secretary, suggested that the government set up an inter-ministerial panel with representatives from various ministries so that projects can be cleared swiftly.
She highlighted the plight of the western state of Goa where iron ore mining has come to a standstill due to lack of coordination for renewal of mining leases.
In the past Goa used to account for about a third of India’s iron ore exports and the country used to be the third-largest supplier to leading consumer China, until issues relating to environment and illegal mining brought shipments crashing down.
Of late, iron ore exports have started picking up again from India’s eastern region.
Sumit Deb, chairman and managing director of state-run NMDC, which is the country’s largest iron ore miner, said procedural issues have kept the mining sector’s contribution to the country’s GDP.
This has been historically due to delays in auction of mines. Only about 10% of area identified with mineral potential has been explored.
India’s mining exploration budget currently stands at around US$54 million compared to Australia’s US$ 1,528 million though the geological potential of the land is believed to be similar.