'New mining policy to draw FDI of Rs 5 trn'

The long delayed new mining policy, expected in two to three months, is set to attract a foreign direct investment (FDI) of Rs 5 lakh crore within five to six years of introduction, according to Minister of State for Mines Subbarami Reddy.

"It generate direct and indirect employment of one million," said Reddy on the sidelines of a aluminium seminar in Mumbai last week. Industrialists across the world are eyeing India's rich mineral reserves of which only 5 per cent of the 18.7 lakh sq km of the country's mineral wealth is exploited.

However, foreign industrialists are grappling with delays in land acquisitions, project clearances and mining leases. These issues have been sorted out in the new mining policy, Reddy claimed.

The mining sector has also been facing problems regarding environmental protection and tribal rehabilitation. As most of the country's mining reserves lie in the forest area, both the government and industrialists are facing resistance from locals.

The minister, however, has appealed to project resistance groups to educate tribals of the benefit of the industrial projects.

The minister hoped that the country would be able to mine gold and diamonds worth at least Rs 10-15 lakh crore in the next five years with the help of global mining giants Rio Tinto, BHP Billiton and De Beers.

India imports gold and diamond worth Rs 140 lakh crore, of which diamonds comprise Rs 75,000 crore. "In the next 10 years, a larger share of the gold consumed in the country will come from domestic mines," he said.

The country imports about 750 tonnes of gold per annum from African and Russian countries to meet domestic demand.