| NEW DELHI, June 29
NEW DELHI, June 29 India's draft mining bill
will offer a prospecting licence guaranteeing the holder the
right to produce 100 percent of any find, as the country seeks
to attract foreign money and technology to its underperforming
The bill will also create an independent regulator for the
sector, Mines Secretary S. Vijay Kumar told Reuters, and should
be approved by end-2012.
"There is a dire need to attract capital and attract
technology," he said, adding India's mineral potential matched
resource rich western Australia and southern Africa but
exploration had only scratched the surface so far.
The Large Area Prospecting Licence (LAPL) proposes areas up
to 5,000 square kilometres (sq km) for hunting for resources,
allocated for a six-year period. Around 570,000 sq km of the 3
million sq km country has high potential for finds, he said.
"If you find the deposit, you have the mining licence and
you go for mining. If you don't find the deposit, you leave
empty-handed," he said, adding companies would have to hand data
from the area to the government.
"It is certainly a first that you go from reconaissance
straight to mining," Vijay Kumar added.
India's mining sector has only opened up fully to private
investors in recent years and state-run companies have lacked
the funds and expertise to probe deeper than the top 50 metres
or so where its iron ore and coal reserves are found.
Global mining giants BHP Billiton and Rio Tinto
have only small ventures so far in the country. In
Orissa state, for example, Rio Tinto has been negotiating since
1995 with the state government to develop iron ore deposits in a
The mining bill should go to the government for approval
after possibly a final meeting of a group of ministers on July 7
and could be presented in parliament in August. The bill could
take a year or so to make its way through parliament.
The draft mining law also proposes foreign firms share some
of their mining profits with local communities as the coalition
government tries to reassure its large rural vote natural
resources are not being carted away by outsiders, a resentment
which Maoist rebels are tapping into in some areas.
Years of protests, sometimes violent, have delayed many
projects, including South Korean steel maker POSCO's
plant in Orissa state, the biggest foreign direct investment in
India at $12 billion.
In addition to the new LAPL concession, the government is
studying ways to bring venture capital into the sector, Vijay
Kumar said, including offering tax breaks to investors and ways
for Indian companies to access capital abroad.
(Editing by Jo Winterbottom)