Page 10 - The Mineral Development and Regulation Framework in India (English Version)
P. 10
Discussion Paper
Australasian Institute of Mining and Metallurgy, 35 MC Rules 1960, except that it would more
the Australian Institute of Geoscientists, and the objectively rank the applicants.
Mineral Industry Consultants Association with
the participation of the Australian Securities Deep-located minerals like base metals,
and Investment Commission, the Australian noble metals, etc.: The State may be unable,
Stock Exchange, the Securities Association of given its limited technical resources, to
Australia, etc. The Code endeavours, as any actually identify and notify areas of enhanced
valuation procedure must, to ensure materiality, mineralization (much less make a resource
competence, independence, and transparency estimation and valuation) because of the large
in the valuation process. It lays down guidelines extent of areas involved, the specialized nature
for the valuation methodology to ensure that it is of the technical and human resources required,
suitable for the mineral asset under consideration and the difficulties in justifying public outlays on
and that the valuer conducts suitable checks, ventures with such uncertain outcomes. Instead
enquiries, analysis, and verification of the data the State may depend on private parties to make
used for valuation. The Code also requires a an application under the first-in-time provision.
sensitivity analysis showing the effect of changing Ideally, a first-in-time procedure would be the best
the most significant assumptions in the valuation. incentive for private parties to invest in exploration
in such high-risk high-reward ventures. Bidding
All this needs strong technical support at the is clearly not an option at this stage since there
operational level to verify that the “enhanced is nothing of value to bid for. The State may, if
mineralization” and the valuation conforms to it chooses, notify areas and invite competitive
an adequate standard, which commands the applications for HTREL type concessions, based
confidence of the industry. Perhaps the Indian on exploratory spends proposed by the applicants.
Bureau of Mines (IBM), or a National Mining Obviously as a consequence, there needs to be a
Regulatory Authority to be created, should be seamless transition to a mining lease. Given the
capacitated and tasked with appropriate aspects high technology involved, and the nature of the
of this process. data generated and its likely use in future and the
need to monitor the “Exploration Plan” closely in
Partly prospected bulk minerals: Some of such cases, the GSI and the IBM would need to
the parameters generally used while calling for be closely involved.
bids relate to value addition and end use, etc.,
which may involve a trade off with the financial Given the nature of the costs, risks, and the rewards,
bid. In the case of partly prospected deposits, it goes without saying that “first-in-time” is by far the
the technical and economic feasibility is highly better principle to apply here for grant of concessions.
uncertain. In such cases, rather than an attempt The notification route should at best be an option
to unsuccessfully ride two horses, it may be useful available to ensure due attention to exploration
in fact to continue with the notification process spends. As such, it should be taken recourse to only
for specified parameters, but without a financial if the proposed spend seems exceptionally low given
bid, to cover cases of enhanced mineralization the current state of data, or where the applicant
in areas covered by reconnaissance/prospecting, seems to possess inadequate resources to achieve the
but where the resource estimation to an proposed exploration spend.
adequate standard is not possible or where
valuations are not practicable or advantageous. Transferability of concessions
Such a notification would in fact then be fairly
similar to the process currently covered by Another major change under consideration, based
Section 11(3) MMDR Act 1957 read with rule primarily on the Hoda Committee Report (and Para
3.3 of the National Mineral Policy 2008) is to make
10 JANUARY 2015
Australasian Institute of Mining and Metallurgy, 35 MC Rules 1960, except that it would more
the Australian Institute of Geoscientists, and the objectively rank the applicants.
Mineral Industry Consultants Association with
the participation of the Australian Securities Deep-located minerals like base metals,
and Investment Commission, the Australian noble metals, etc.: The State may be unable,
Stock Exchange, the Securities Association of given its limited technical resources, to
Australia, etc. The Code endeavours, as any actually identify and notify areas of enhanced
valuation procedure must, to ensure materiality, mineralization (much less make a resource
competence, independence, and transparency estimation and valuation) because of the large
in the valuation process. It lays down guidelines extent of areas involved, the specialized nature
for the valuation methodology to ensure that it is of the technical and human resources required,
suitable for the mineral asset under consideration and the difficulties in justifying public outlays on
and that the valuer conducts suitable checks, ventures with such uncertain outcomes. Instead
enquiries, analysis, and verification of the data the State may depend on private parties to make
used for valuation. The Code also requires a an application under the first-in-time provision.
sensitivity analysis showing the effect of changing Ideally, a first-in-time procedure would be the best
the most significant assumptions in the valuation. incentive for private parties to invest in exploration
in such high-risk high-reward ventures. Bidding
All this needs strong technical support at the is clearly not an option at this stage since there
operational level to verify that the “enhanced is nothing of value to bid for. The State may, if
mineralization” and the valuation conforms to it chooses, notify areas and invite competitive
an adequate standard, which commands the applications for HTREL type concessions, based
confidence of the industry. Perhaps the Indian on exploratory spends proposed by the applicants.
Bureau of Mines (IBM), or a National Mining Obviously as a consequence, there needs to be a
Regulatory Authority to be created, should be seamless transition to a mining lease. Given the
capacitated and tasked with appropriate aspects high technology involved, and the nature of the
of this process. data generated and its likely use in future and the
need to monitor the “Exploration Plan” closely in
Partly prospected bulk minerals: Some of such cases, the GSI and the IBM would need to
the parameters generally used while calling for be closely involved.
bids relate to value addition and end use, etc.,
which may involve a trade off with the financial Given the nature of the costs, risks, and the rewards,
bid. In the case of partly prospected deposits, it goes without saying that “first-in-time” is by far the
the technical and economic feasibility is highly better principle to apply here for grant of concessions.
uncertain. In such cases, rather than an attempt The notification route should at best be an option
to unsuccessfully ride two horses, it may be useful available to ensure due attention to exploration
in fact to continue with the notification process spends. As such, it should be taken recourse to only
for specified parameters, but without a financial if the proposed spend seems exceptionally low given
bid, to cover cases of enhanced mineralization the current state of data, or where the applicant
in areas covered by reconnaissance/prospecting, seems to possess inadequate resources to achieve the
but where the resource estimation to an proposed exploration spend.
adequate standard is not possible or where
valuations are not practicable or advantageous. Transferability of concessions
Such a notification would in fact then be fairly
similar to the process currently covered by Another major change under consideration, based
Section 11(3) MMDR Act 1957 read with rule primarily on the Hoda Committee Report (and Para
3.3 of the National Mineral Policy 2008) is to make
10 JANUARY 2015
