India opens 100 mineral blocks to private companies

India has identified 100 blocks for exploration that will be offered to the private sector, in a new effort to boost the country’s mineral output and cut dependence on overseas purchases.

Under the Union mines ministry's new draft policy, private explorers would get a share in the revenue from the successful bidder of a block, minister Narendra Singh Tomar said in a statement.

The blocks cover a 12,000 square km area and could be rich in gold, iron ore, tin and tungsten, among other resources.

Three gold mines

The auction include at least three gold mines, a top government official told Times of India, as New Delhi tries new ways to axe imports of the precious metal that cost the government $36 billion last year.

The move is New Delhi's latest effort to boost the country’s mineral output and cut dependence on overseas purchases.

Of the mines to be auctioned, two are new and located in the eastern states of Jharkhand and Chhattisgarh, with combined gold ore reserves estimated at up to 3 million tonnes. The third asset to be auctioned would be the now abandoned Kolar mine, in Karnata, which was shut down 15 years ago due to high costs.

Indian billionaire Anil Agarwal's Vedanta Resources (LON:VED) and world’s No.2 mining company Rio Tinto (LON:RIO) are said to be the most likely bidders.

India also launched Wednesday also launched the Geological Survey of India’s ‘Uncover’ project, which will be implemented in two selected areas of the country. The scheme focuses on probing for deep seated or concealed mineral deposits, according to the statement.

Selection of private explorers will be done through a transparent process of competitive bidding through e-auction.