Discussion Paper : The Mineral Development and Regulation Framework in India
The Paper highlights the governance and regulation issues that need to be addressed as part of the reform of the mineral concession system.Also it brings out the merits of bidding and first-in-time systems in their specific contexts. The difficulties of resource estimation and valuation in bidding systems are analysed. The paper underlines the need to ensure that the mineral concession system, on one hand, promotes scientific mining within a sustainable development framework, and on the other, incentivizes exploration and induction of advanced technologies for the purpose, and also ensures that the State gets a fair value for the minerals extracted. The Paper concludes that a first-in-time system is necessary to promote exploration in a high risk environment by providing commensurate rewards; and that given the current uncertainties in the state of knowledge of our mineral resources, a sliding-scale ad-valorem royalty may be better than bidding to optimize revenues while ensuring business confidence and a level playing field.