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Q. The National Mineral Exploration Policy: Comment on recently unveiled new National Mineral Exploration Policy.
Jul 07, 2016 Related to : GS Paper-1 and 3

Ans :

Introduction-

Recently central government has approved The National Mineral Exploration Policy (NMEP), which will pave the way for auction of 100 prospective mineral blocks, boosting India’s mining potential. With the new policy now private firms can participate in exploration on a revenue sharing basis.

Key features of policy-

  • NMEP will pave way for auction of 100 prospective mineral blocks.

  • It allows private mining companies to carry out regional and detailed exploration of mining blocks on a revenue sharing basis.

  • It does away with earlier first-cum-first-serve basis, and all participants will now have to bid for mining blocks through an auction.

  • Revenue sharing model for exploration to be lump sum or an annuity basis payment.

  • Revenue Sharing of 2% of royalty will be set aside for National Mineral Exploration Trust.

Analysis-

  • The new policy will spur the private participation by braking monopoly of state owned companies, which in turn will bring better technologies in strategic activities.

  • It seeks to address the shortcomings of past and present policies and laws. Doing away with first cum first service (which was considered as reasons for various scams) with e-auction will bring transparency and also it will expedite the process.

  • The new policy promotes vibrant exploration sector is essential for the long-term growth of both the mining sector and the economy.

  • It identifies minerals (excluding coal and oil), whose exploration should be prioritised in view of growth, current account, and strategic interests. It will play key role in the economic development of country.

  • The policy also takes care of explorer, it compensate the costs in the wake of an unsuccessful exploration effort, which encourages private players to take part in exploration activity.

Suggestion-

  • For proper price discovery and credibility of mines, government must ensure reliable, accessible database on mineral availability.

  • Governments of all level must take care of environmental concerns and should address issues like rehabilitation more effectively.

  • As socio-political consensus important in sensitive activities like mining, government should take local communities on board in decision making process.

Conclusion-

Till now we have explored only 10% and less than 2% mined, hencea vibrant exploration sector is essential for the long-term growth of both the mining sector and the economy.To encourage mineral exploration in the country, the government has already notified the National Mineral Exploration Trust. In this direction a new mineral policy is welcome step and it will boost countries mineral exploration sector.


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