Finders keepers. Sounds very reasonable indeed. The Indian government will grant reconnaissance permit (RP) holders a ‘first right of refusal’ should the mineral block be put up for auction. The first right of refusal will be given to the RP holder if it has established evidence of minerals.
This move will help the sentiment of the investors who are likely to show interest in the mining blocks. This recognition will help the RP holders stay away from objecting to competitors who bag mineral blocks that they have established deposits on.
This approval is part of the National Mineral Policy 2019, ratified by the Union Cabinet last week in the first week of March 2019. However this approval has the details of the policy is not in public domain.
This policy also ensures that the government is given the power to take back the blocks that are were allocated to government run mineral companies which were lying unexplored. It must be noted that most of the government run companies have failed to develop the assets that were allocated to them.
This also means the the onshore and offshore fields allocated to big public sector companies like ONGC and OIL India will be taken back and put up for auction for private investors.
The policy also dwells on the need for rationalization of various taxes and levies that the mining industry are slapped with and trying to get some global context into it. Currently the domestic miners are burdened a cumulative taxes between 30% to 60% which would include Levis, royalties and contributions.
The other significant move is to provide industry status to the mining sector we are likely to see a boost in financing of the mining by the private sector and the acquisition of mineral assets overseas by the private sector. Granting “industry status to the mining sector would mean that it comes under the Industrial Disputes Act and it only will burden the sector with more laws and regulations.
This policy is just an extension of the mining policy of 2015 with few additions and clarity. According to the Federation of Indian Mineral Industries (FIMI) we are unlikely see private investments into the sector if the Current auction rules are not changed