It’s no secret that India is rich in minerals. But unlike most nations blessed with resources, the country has a history of discouraging foreign investment in mineral exploration. Even as jurisdictions in Africa, South America and Southeast Asia cozied up to foreign investors in the 1980s and 1990s, India remained a no-go zone.
Those who did dare to tackle the byzantine world of India’s mineral tenure system were quickly discouraged by endless paperwork and bureaucracy. And without foreign capital, lots of mineral potential simply remained in the ground.
That may be about to change as the Indian government tables a new mining policy. While nobody should be holding their breath (changes have been called “imminent” several times since India formed a high level committee four years ago to review the country’s 1993 National Mineral Policy and its 1957 Mines and Minerals Act), the new regulations would streamline foreign direct investment in non-coal metals and minerals exploration.
Several Canadian and Australian companies have expressed an interest in setting up camp in India provided the law is changed to make exploration feasible. One change, for instance, would see the Geological Survey of India (GSI) – currently responsible for most of the exploration in the country - provide internet access to all of its data, maps and reports. Another proposal would substantially increase the area covered by a reconnaissance exploration permit to 5,000 km2, making aerial geophysical surveying more cost-effective.
According to Business Monitor International, which is optimistic that the mineral policy will change radically enough to attract foreign investors, India’s mining industry is expected to grow at an average annual rate of 8.1% over 2008-2012, to be valued at US$74.6 bn by 2012.
As mineral resources worldwide become increasingly scarce and harder to find, India may be about to open a whole new frontier that has hitherto been underexplored and underdeveloped. Juniors and seniors alike should be watching political developments in India closely and be ready to act when the time is right.