The three-day international event Mining. Exploration Convention and Trade Show (Mining Mazma 2019). 9'“ in its series. being held from 12'" to 14'" September. 2019 in beautiful and green city Bengaluru. capital of Karnatake State. Mining Mazma provides an unique platform for all the stakeholders viz. policy makers, technologists, explorations companies. mining professionals. equipment suppliers, academicians and civil societies to share the latest development in their respective fields.
2. This Convention and Trade Show, one of its kind, sponsored by Ministry of Mines and organized by FIMI with the support of PDAC and MSTA Canada is being held at very opportune time when there is need to have enhanced focus on mining sector which has great potential to play its vital role towards significant contribution to country’s economy as well as boosting the much needed employment generation.
3. There has been paradigm shift in terms of statutes, regulations and policies in respect of the mining sector with a view to unlocking and effective utilization of the country’s mineral resources. However. the sector is facing numerous challenges in terms of their implementation and in achieving the desired objective of revival and growth of mining sector.
4. Indian mining sector has great potential for its growth and lot of scope for investment particularly in the areas like exploration, drilling, mining operations. beneficiation and other related sub-sectors. Though geologically being a part of Gondwana land, India has the same prospectivity as other resouroe-rich countries such as South Africa, Canada, Australia, Brazil, Indonesia, Chile etc. but unfortunately our country remains under explored. Even after 72 years of Independence, the contribution of mineral sector to country’s GDP is quite low POCOS meagre 1.53% during the year 2017-18 while mineral resource rich
countries like South Africa and Australia's mineral sector contribution to their country’s GDP is to the tune of 7 to 7.5%.
5. Exploration is the foundation for establishment and development of the mineral resource base to have sustained and strong growth of mining industry. However. India's resources are inadequately explored particularly for non-bulk and deep seated minerals like gold, diamond. copper, nickel, lead & zinc, PGMs and REES. While countries like Canada and Australia has share of 13-14% each in the global exploration expenditure but India’s share is negligible. Mineral exploration being high risk area involving big investment , globally the exploration is undertaken by private sector comprising mainly of Junior Exploration Companies who have domain expertise. However, in our country, the exploration activities are mainly confined to Government sector agencies like GSI, MECL, DMGs and some nominated public sector companies. Considering the limitation of government agencies in terms of requisite resources and advanced technologies and restricted role of private sector, exploration activities remains subdued. Owing to inadequate exploration and subsequent under harnessing of mineral resources, country is heavily dependent on imports of minerals and is importing about seven times more than the value of domestic production of major minerals.
6. With a view to have enhanced focus on exploration activities in the country, Government effected amendments in MMDR Act in January, 2015 followed by NMET and NERP (Non-Exclusive Reconnaissance Permit) Rules but its effect has not been up to the mark since there is hardly any role of private sector in exploration in the current regulatory regime. NERP Rules stipulate that permit holder shall not be entitled to make any claim for grant of PL-cum-ML or ML. Since these Rules do not guarantee security of tenure and further rights of concession, no private sector has evinced interest in carrying out the exploration activities. It is a matter of concern that even after elapse of more than four years of implementation of NERP Rules, not even a single reconnaissance permit has been granted so far through out the country.
9. The primary objective of exploration is to extract and sell a product at a competitive price, a price that justifies the investment in exploration and mining. Thus, mineral taxation plays a key role in exploration as well as overall growth of the mining sector. The existing mineral taxation regime is not conducive to attract private / junior exploration companies to work in India. Mining industry in India is the highest taxed in the world with Effective Tax Rate as high as 64% for mines granted before 12th January, 2015 and 60% for mines granted thereafter. Over and above this, there are other host of taxes viz. 18% GST on royalty, 10% tax levied by Hon’ble Supreme Court in Goa and Karnataka, FDT in Karnataka, NPV in case of prospecting and survey besides other charges payable towards statutory clearances and local taxes I cess. If all the imposts are added, the total financial burden goes
beyond 100% of the cost of a mineral. It is therefore imperative that mineral taxation including royalty is rationalized in line with the mineral rich countries which will give impetus to exploration as well as mining activities and facilitate in achieving the desired objective of enhancing the current contribution of mineral sector in
country’s GDP.
10. The initiative taken by Ministry of Coal in February, 2018 for deregulating the
coal sector by allowing commercial mining of coal by the private sector and recently permitting 100% FDI in commercial coal mining are welcome steps. FIMI urge the government to commence and hasten the process of offering of coal blocks for the
private sector for commercial mining.
11. Mining Mazma is the signature and the only annual international mining event
in India organized by FIMI which has now got a unique distinction globally and
getting overwhelming response year after year. Major mineral rich nations like
Canada and other countries are actively participating in the Convention as well as in Trade Show which is a testimony to its standing. In addition, number of exploration,
POCO companies, equipment suppliers, service providers both national and also participating in this event.
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