Mineral Auctions in India: Not Much to Show for the Three Years Gone By!
It’s been three years that the new minerals code MMDR 2015 (Amendment) Act of India came about. Governments have been able to auction 29 postage stamp sized mineral blocks of mostly limestone, some iron ore, gold, bauxite and a low grade manganese blocks todate. These 3 years, not a single mine has opened. Not even the old mines. Actually, not a single new mine in the minerals sector became operational in last 10 years or so .. or probably even longer. In last ten years, whilst the private sector exploration has been almost completely stalled, government’s efforts have hardly got a successful discovery, which could make it to the next level towards wealth creation!! All the stakeholders in the Indian mining industry know what’s wrong. Flawed exploration statutes doesn’t allow incentives to explore. Regulatory system doesn’t work and every mining entity face a risk of being called a thief. The land acquisition process is not working, the labour laws harm both the labour and the entrepreneurs. The mining regulations are prescriptive and do not mitigate the risks to sustainable mining. The operating margin for a miner, at such high cost of an asset procurement and low commodity prices is at all time low. Have we seen the bottom yet, for our industry!!