With private sector spending on exploration of commodities like gold and diamonds pegged at an insufficient $1 billion over the next five years, a Mines Ministry panel has favoured opening up all mineral-bearing areas, barring sensitive zones, to entrepreneurs.
"It may be realised that even with the outstretched expectation of private sector contribution of $1 billion (Rs 4,500 crore) for next five years, the nation cannot fulfill the balance to reach the optimum level of spending of 4% of global spending on exploration," it said.
India needs to encourage exploration and mining of high-value, low-volume commodities like platinum, zinc, etc, through the initiative of private entrepreneurs, a ministry panel headed by additional secretary SK Srivastava has said.
"Barring reservation of sensitive areas, all areas which have potential of hosting these commodities should be kept open for private investment," the panel to assess the need of mineral exploration and development (other than coal and lignite) for the 12th Five-Year Plan (2012-17) added.
Assessing the scale of private investment, including FDI, during the Plan, it said major foreign players like De Beers India, Rio Tinto, Anglo American, Adi Gold Mining, etc, are actively engaged in mineral exploration in the country.
It said though they have committed substantial sums, it is insufficient, while "domestic private investment for exploration has remained insignificant in the country before and after liberalisation" and the government is trying to accelerate the investment.
"To accelerate FDI infusion, the government of India through the Ministry of Mines has been interacting with Namibia, Argentina, the Prospectors and Developers Association of Canada, Western Australia, Canada, Chile, South Africa, Iran, Thailand, etc, through diplomatic channels, entering into MoUs," it said.
It added that India fares poorly among mining nations and saw minimal investment, whereas global exploration spending during the 2001-10 period stood at $62.096 billion.
In contrast, FDI in the India's mining sector amounted to just $6.62 million in 2006-07, $444.26 million in 2007- 08, $34.22 million in 2008-09 and $86.63 million in the first half of 2009-10.
