India expects to woo Rs 1 trillion ($15 billion) of investment over five years to double mining output and cut mineral imports.
The government’s goal is to speed up exploration, including upfront payments for discovered deposits when the mines are auctioned, Mines Minister Piyush Goyal said in an interview. The administration will invite foreign companies to participate, he said, while acknowledging challenges such as land acquisition and environmental hurdles.
“We’re working to change the rules of the game from doing small amounts of exploration in an incremental fashion to doing it on a fasttrack, oneshot, bigpicture way,” Goyal, 52, said. There’s “easily” scope to pour Rs 50 billion into the search for deposits, he said. The world’s fastest growing major economy will need increasing supplies of everything from iron ore to coal to achieve Prime Minister Narendra Modi’s objective of faster development powered by more manufacturing.
Rio Tinto Group and steelmaker Posco are among foreign companies that have put Indian plans on hold because of red tape and difficulties in acquiring land, an indication of the challenges Goyal’s agenda faces. Read why Rio Tinto is closing a major Indian diamond project Thw country in 2015 embraced competitive auctions as the best long term approach to resource allocation after bruising corruption scandals over discretionary or free allotments.
The nation auctions exploration and mining rights. Officials earlier had worked out a policy of paying explorers a royalty over the life of a mine, rather than upfront, after critics said there wasn’t enough incentive for companies to scour for minerals. Goyal, who is energy minister and added mining to his portfolio when Modi reshuffled his Cabinet in July, said mineral exploration in India is “nascent.” He recommended that overseas explorers and miners consider ventures with local partners and install largely Indian management to increase their chances of success in the $2 trillion economy
The minister said he’s assessing the minerals being imported by India to focus the country’s exploration efforts. Imports of iron ore, for instance, may amount to about 10 million tons in 2016, according to the CRU Group, a commodities researcher. Environmentalists have resisted an effort by Vedanta Ltd. to mine the mineral at Niyamgiri in the eastern state of Odisha. Coal Boom Goyal led a boom in the country’s coal production, reversing years of shortages and curbing imports of the fuel Click here to Read more