Despite having good geological prospectivity, the exploration spend in India is abysmally low, said H Noor Ahmed, president, Federation of Indian Mineral Industries (FIMI).
“India figures nowhere in the global exploration budget,” said Ahmed, in his welcome address at FIMI’s ‘Mining Mazma’ — a three-day mining exploration convention and trade show.
According to Ahmed, “While 14 per cent of the total world exploration expenditure was spent in Canada, 12 per cent in Australia, 6 per cent in China, India figures nowhere.” Of the $10.74 billion spent globally, about 50 per cent was on gold exploration, 20 per cent on copper, 5 per cent on lead-zinc, 9 per cent on nickel, 4 per cent on diamond, 2 per cent on PGM, and balance 10 per cent on rest of the minerals.
Given the high odds and risks in exploration, India needs an attractive exploration policy which will encourage private investment and expertise. “Government should define a timeframe for base level geological data generation of potential areas. It should also provide comprehensive geological, geo-chemical and geo-physical data sets to facilitate investment as practised in countries like Australia and Canada,” he said
“The mining industry in India is the highest taxed. The effective charge to a miner comes to approximately 60 per cent as compared with 35-40 per cent in other countries,” Ahmed said. A business-friendly tax regime, he said, will encourage exploration companies to build large inventories of mineral resource and reserves of different grades.
Technology is another area of concern. Though mining companies getting more efficient, they are expected to gain more from automation and computer-linked systems. “Accurate data representing the geology, geo-chemistry, structure, shape location and size of the resource make a successful mine,” Ahmed said.
“New mines capacities have to be opened up in order to cover the increasing demand for basic industries such as steel, power and cement. Most of the exploration activities in the country have been restricted to locating minerals within shallow depths mainly by government agencies,” he added.