India Readies Mining Policy Blueprint
By Ajoy K Das
The blueprint put out in public domain for discussion among various stakeholders is aimed at global resource developers to take up projects in India at a time when response from multinational miners to invest in the country in joint ventures with local companies have been tepid. The Indian government’s policy advisory body, NITI Aayog (National Institute for Transformation of India Commission), has framed the working document that would be the basis for the next round of mining legislative and governance policy.
With total tax, including a plethora of royalties and mandatory levies aggregating at 65%, this made mining projects in India the highest taxed in the world. The working document caps a cumulative tax on mining exploration and development projects at 40% to make foreign direct investments (FDI) more attractive for global mining companies. The policy advisory body has also laid down that specific mining leases auctioned to exploration or mining companies should include provisions for “co-mining.” This would mean that any leasehold auctioned for a specific mineral would permit the successful bidder to undertake mining of all other minerals that may occur in the leasehold area other than specific mineral block that was put up for auction.
However, the most significant proposal for developers was an offer of risk funding to take up exploration projects across the country. The model being worked out would entail developers to float startup joint ventures with Indian companies in which former could take majority control. Such joint venture entities would be eligible for risk funding through the National Mineral Exploration Trust (NMET) fund operated by the Indian government to de-risk projects that may be taken up by such ventures.