Gold, diamond mining firms seek to dig wider

Urge Centre to extend the prospecting exercise limit up to 500 sq km

The gold and diamond mining firms in the state are an unsatisfied lot. The decision of the Centre to limit the prospecting exercise to just 25 square kilometres has not gone down well with them.

With the great hunt for gold and diamonds in Andhra Pradesh entering into a critical phase, the firms that have completed the reconnaissance survey for the precious stones and metals have approached the Government of India to relax norms so that they can undertake prospecting studies in a larger area.

As per the Government of India rules, prospecting licence will be given only for a maximum of 25-square km area irrespective of the area given under the reconnaissance permit (RP) to each agency.

These companies have now acquired huge scientific data to take up more definitive studies to identify the places of natural treasure troves that make their endeavour successful.

About nine agencies, many of which are the Indian subsidiaries of foreign MNCs, had been given RPs to conduct pre-prospecting surveys in a total area of about 50,000 square kilometres mostly covering Anantapur, Kurnool, Cuddapah, Mahbubnagar, Nalgonda, Krishna and Guntur districts in the state.

The firms have urged the central authorities to extend the prospecting exercise up to 500 square km area.

"An agency which undertook reconnaissance study in a 10,000-square km area will be forced to confine to just 25-square km area when it comes to the prospecting stage. I cannot find any rationale behind this rule," an official of a private firm who has applied for prospecting licence (PL), told Business Standard.

Of the 40 applicants, the RPs were issued to AMIL India Limited, Anglo American Exploration India Private Limited, BHP Khanija Anveshan Private Limited, C R A Exploration India Limited, De Beers India Private Limited, Geo Mysore Services India Private Limited, Mines Management India Private Limited, National Mineral Development Corporation (NMDC) and Philips Dodge Exploration India Private Limited.

Besides, exploration permits were given to WSIL Mineral Sand India Private Limited for beach sand mineral extraction project. Most of these companies were allowed to apply for reconnaissance permits for a maximum extent of 10,000 square km.

While most of these agencies applied for the exploration of diamonds and gold, companies such as Anglo American Exploration Private Limited got RPs for the exploration of base metals like copper and lead.

The RPs were granted from the year 2001 for a period of three years. The companies have to surrender 50 per cent of the area to the government after two years from the grant of RPs.

After finishing the RPs, the firms can go in for PLs. And once the prospecting studies are over, the companies can apply for mining leases (MLs) to take up mining operations.

But in the case of Mines Management India Limited, the firm has applied for both prospecting and mining licences, while companies like De Beers have applied for PLs even while continuing RPs in certain parts of the granted areas.

According to sources, C R A Exploration India has so far identified over 68 prospective areas while the NMDC zeroed in on 2-3 areas. Each of these companies were said to have spent between Rs 10 and Rs 30 crore for pre-prospecting studies.

"It may take another 5-6 years for most of these companies to complete the prospective surveys and reach to the stage of acquiring mining leases," P Dayasankar, director, mining, Andhra Pradesh government said. He admitted that there has been a demand from most of these firms to increase the area for prospecting exercise.

"It is for the Government of India to take a final decision in this regard," he said, adding, "the applications received from the firms for granting PLs are being processed and some of them have already been forwarded to the Centre for necessary permission."

According to sources, the Centre is also considering a proposal to amend the existing act so as to ensure continuity between RPs and PLs. The provision to allow firms to conduct pre-prospective or reconnaissance study was of recent origin in India, he said.