The Hindu Business Line : Govt mulling 100% FDI in titanium mining

New Delhi May 16 In order to increase the availability of titanium, a strategic mineral that is used in manufacturing airframes and engines of aircraft and other components, the Government is contemplating allowing 100 per cent foreign direct investment in limonite mining (titanium ore).

As of now, up to 74 per cent FDI is permitted with a mandatory clause that the Indian partner must be a public sector unit. The move follows demands from the airline industry.

According to Government sources, "Companies interested in undertaking maintenance repair and overhaul (MRO) of aircraft have been seeking an increase in the FDI limit for titanium mining in India because it would give them cost advantages." Preparation of the Cabinet note for this purpose is in the final stage but still there seems to be more than one opinion on this issue within the Government. "Since titanium is a strategic mineral there are divergent views in this regard, we are taking a wait-and-watch approach. But the exponential growth in the civil aviation sector makes it imperative to move forward," sources pointed out.

They added that Boeing too is looking at sourcing a substantial amount of its titanium requirement from India.

"Various Indian companies have ordered close to 120 aircraft that are to be delivered in the next couple of years, and the company has also been witnessing an increase in demand from various other airline operators. So they have shown interest in mining and processing of limonite ore, the raw material used for producing titanium, from India as they would save a lot on manufacturing costs," the officials said.

Meanwhile, the proposal for increasing the FDI limit from 49 per cent to 74 per cent in non-scheduled charter and cargo airlines is likely to be placed before the Cabinet next month along with proposals to allow 100 per cent FDI in MRO activities and flight training institutes, sources said.

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