50 per cent of Indian mining permits fall flat

12 December 2008

New Delhi: Over 60 per cent of exploration activities in the Indian mining sector come to nought.

At a time when mining has been identified as an area to boost investment, failures have marked the day for both Indian and foreign companies, including giants like Rio Tinto, Anglo American, De Beers and BHP Billiton.

Media reports said that a survey conducted by Indian Bureau of Mines has revealed that the Indian government granted 292 reconnaissance permits (Rps) that allow regional exploration to a number of companies between the year 2000 and September 2008.

Of these, 183 permits were either relinquished or surrendered by exploration companies, as mining the explored mineral was not commercially viable. Around 70 of the 183 permits turned in had been issued to multinational miners such as Rio Tinto, Anglo American, De Beers and BHP Billiton.

Exploration in India is divided into a three stage process – the first being reconnaissance under a reconnaissance permit, the second being prospecting after being issued a prospecting licence which helps evaluate the mineral reserves in more depth. The third stage is where mining actually commences after the issue of a mining licence.

The report also highlights the inordinate delay in grant of mineral concessions and approvals to mining and exploration companies. Of 53 companies which applied for prospecting licenses, just five were granted licenses to carry out a detailed exploration between 2000 and 2008.