The negative impact in mining sector for discouragement of private investment in mineral exploration and development.
Discouragement to Private Investment in Mineral Exploration and Development
The National Mineral Policy 2008 of Government of India vide item 5.2 states that “while Government Agencies would continue to perform the tasks assigned to them for exploration and survey, the private sector would be the main source of investment in reconnaissance and prospecting and government agencies would spend public fund primarily in areas where private sector investment are not forthcoming”. However on the contrary, 11 Central and State PSUs have been notified as agencies for carrying out exploration under section 4(1) of the MMDR ACT 1957. This may not yield any result, since detailed exploration is not the core activity of these agencies. On the other hand, the National Mineral Exploration Policy 2016 (NMEP) states that Private agencies could be engaged to carryout exploration work in identified blocks/areas with the right to a certain share in the revenue (certain percentage of royalty/premium) when Mineral blocks on the basis of successful exploration are put on e-auction.
It may be mentioned that private investment is a function of risk and return in prospecting and because of uncertainty in this proposal, the private investment is not foreseen and may not materialize.