With the rapid industrialization of China and all that goes along with it (such as increased metals demand) garnering so much media attention, it’s perhaps not surprising that the world’s second most populated country, India, has been attracting comparatively less attention among exploration companies.
But that’s all changing as India proceeds to initiate policies that are designed to make it easier for companies to exploit the country’s mineral potential.
Low inflation, low interest rates, and high foreign-exchange reserves are hallmarks of the Indian economy, which is estimated to have a gross domestic product growth rate of 5% versus 8% for its larger neighbour, China. And if you don’t believe government-compiled numbers on GDP, just try to get a decent hotel room in one of its major cities. They are generally jam-packed with Western businessmen looking for investment opportunities across a broad range of industrial sectors, including mining.
India possesses a rich endowment of mineral resources and its mining industry produces at least 84 minerals, four of which are fuel minerals; 11, metallic; 49, non-metallic; and 20, minor minerals.
As one would expect, considerable scope exists for augmenting production from established sources by further exploration of known deposits, employing methods that are commonly used in countries with mature industries.
India’s National Mineral Policy was revised in 1994, allowing private investment (both domestic and foreign) for the exploration and exploitation of 13 minerals: iron ore; copper; manganese; lead; chrome ore; zinc; sulphur; molybdenum; gold; tungsten ore; diamonds; nickel; and platinum group metals.
It took a while, but subsequent amendments to the Act made it more aggressive and investor-friendly, even though bureaucratic problems with its implementation persist.
One of the more important refinements to the Mineral Policy Act was the acceptance that reconnaissance operations are a stage of operations distinct from, and prior to, actual prospecting operations.
Reconnaissance permits are now granted for three years and can aggregate some 10,000 square kilometres in a specific state, though a single permit is 5,000 square kilometres.
Permit-holders have a “preferential right” to be granted a prospecting licence. Such a licence covers a maximum area of 25 square kilometres, is granted for three years, and is renewable for two more years. The next step is a full mining lease, which is 10 square kilometres and good for 20-30 years with the right to renew in blocks of 20 years.
Any Indian national or company registered in India under the Companies Act is eligible to obtain mineral concessions. However, in the case of a firm or other association of individuals, all members of the firm or members of the association should be citizens of India.
In order to obtain a mineral concession in India, foreign companies are required to incorporate and register as an Indian company. There is absolutely no restriction on the extent of foreign holding in such a company as long as it is registered in India. The Indian company can thereafter apply for mineral concessions to the provincial government concerned.
Entrepreneurs investing directly in the non-fuel and non-atomic mineral mining sector are eligible to bring in the foreign equity simply by informing the Reserve Bank of India. With the exception of precious stones and diamonds, automatic approval of foreign direct investment of up to 100% is permissible for exploration and exploitation of all non-fuel and non-atomic minerals, including gold and silver.
For precious stones and diamonds, automatic approval for foreign direct investment is permissible up to 74%. However, even for precious stones and diamonds, higher foreign equity is permissible, and the government considers such cases for approval on merit on a case-to-case basis through its Foreign Investment Promotion Board.
One problem companies are facing in India is obtaining environmental and forest-related clearances. (This probably has a familiar ring for anyone doing business in North America). Also, much like Canada, Indian states have the real control over mineral resources, and many of them have yet to implement policies to accelerate the handling of permit applications. The discretionary powers vested in many government ministries have also been a contentious issue for some companies.
Nonetheless, from a geological standpoint India remains highly prospective for a broad range of mineral commodities, especially in areas were artisanal miners have plied their trade for generations.
The geological and metallogenic history of India is similar to mineral-rich Australia, South Africa, South America and Antarctica, all of which formed a continuous land mass more than 200 million years ago.
Deccan Plateau
India has been known for diamonds longer than any other country, and many of the world’s most beautiful stones were discovered there. For the most part, its diamond discoveries are confined to the eastern side of the Deccan Plateau, immediately south of the Great Plains of northern India. This plateau extends from the Satpura Hills in the north to Kanyakumari, the southernmost tip of mainland India, finally ending in the Indian Ocean.
Diamonds in India are generally found in compact sandstones and conglomerates and in the weathered products of these rocks, including the sands and gravels found in rivers and streams, which have served as a concentrating mechanism for the diamonds.
Even today, high-quality, relatively large stones are being recovered from small-scale alluvial workings in Krishna River and other major rivers of south and central India, though the hard rock sources of these gems have largely eluded detection.
Most diamond-prospective ground in India is held under licence by
About 13 years ago, local villagers discovered four kimberlite pipes near Raipur in east-central India, and some of these proved diamondiferous, with diggers reportedly recovering stones of up to 200 carats.
Canadian companies have been slow to discover India, and the ones that are looking at investing there appear to be focusing on areas with established mineral resources, thereby removing some of the exploration risk yet perhaps accepting a higher political risk.
— The author is a Vancouver-based geologist and freelance writer, and was formerly The Miner’s west-coast editor.
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