The Union cabinet on Wednesday approved the National Mineral Exploration Policy (NMEP) paving the way for auction of 100 prospective mineral blocks, identified by the Geological Survey of India for exploration.
It allows private mining companies to carry out regional and detailed exploration of mining blocks.
"Through the new mineral exploration policy approved, government will encourage more private investment in natural resources exploration on a revenue sharing model, " Finance Minister Arun Jaitley said here, briefing reporters on the cabinet decision.
As per the NMEP, private companies carrying out detailed exploration would get a certain share in revenue in the mining operation from the successful bidder of the e - auction of the mineral block.
"Among conditions set down in the policy is the creation of baseline geo - scientific data.
Government to carry out aero - geophysical assessment.
A National Geo - scientific Data Repository to collate all baseline data generated by central and state agencies.
"A non - profit centre, the National Centre for Mineral Targeting is to be set up, " the Finance Minister added.
Selection of the private explorer is to be through a transparent process of competitive bidding through e - auction.
For this, reasonable mineral blocks for regional exploration will be identified by the state governments for auctioning.
Through the new policy, the government is expecting to attract private sector in exploration, besides involving state - run Geological Survey of India, Mineral Exploration Corporation and other notified agencies.
Once the explorer submits the data after exploration, the state government will auction the mining lease for that block.
The mining lease owner will then pay a certain royalty to the state government.
According to the NMEP, an amount equivalent to certain percentage of this royalty should be paid to the private explorer by the mining lease owner.