The union cabinet has approved the National Mineral Policy (NMP) 2019 that aims to ease merger and acquisition of mining entities, attract private sector participation in exploration, allow transfer of mining leases and creation of dedicated mineral corridors.
NMP 2019, which replaces the extant NMP 2008, also proposes to grant industry status to mining and boost financing for mining and private sector acquisition of mineral assets abroad.
The policy has introduced “Right of First Refusal for holders of reconnaissance permit and prospecting license (RP/PL holders) and auctioning in virgin areas for composite RP cum PL cum ML on revenue share basis,” an official statement said. It also talks of rationalising reserved areas earmarked for PSUs which have not been used and to put these areas to auction and underlines the need to harmonise India’s tax, levy & royalty rates to global benchmarks to draw higher private participation.
The measures drew lukewarm response from mining experts. “This is an extension of the mining policy of 2015 and offers some clarifications on it. However, it is unlikely to attract private funds in mining in absence of any change in auction rules,” R K Sharma, secretary general of Federation of Indian Mineral industries said. “Also, granting of industry status to mining will bring it under Industrial Disputes Act, adding to the plethora of laws that already binds the sector,” he added.
The new policy focuses on use coastal waterways and inland shipping for evacuation and transportation of minerals and encourages dedicated mineral corridors to facilitate the transportation of minerals. While calling for utilization of the district mineral fund for equitable development of project affected persons and areas, NMP 2019 proposes a long term export import policy for the mineral sector as an incentive for investing in large scale commercial mining activity. The 2019 Policy also introduces the concept of Inter-Generational Equity that deals with the well-being of both the present generation and future generations.
Highlights of NMP 2019:
- Ease M&A of mining entities
- Enhance private sector role in exploration
- Allow transfer of mining leases & creation of dedicated mineral corridors
- Grant industry status to mining
- Boost finance for mining & acquisition of foreign mineral assets by private sector, and
- Harmonise tax, mining levy & royalty rates to global benchmarks.