National Mineral Policy (NMP), 1993
In pursuance of the reforms initiated by the Government of India in July, 1991 in fiscal, industrial and trade regimes, the National Mineral Policy was announced in March, 1993. The National Mineral Policy recognized the need for encouraging private investment including Foreign Direct Investment (FDI), and for attracting state-of-art technology in the mineral sector. The policy stressed that the Central Government, in consultation with the State Governments, shall continue to formulate legal measures for the regulation of mines and the development of mineral resources to ensure basic uniformity in mineral administration so that the development of mineral resources keeps pace, and is in consonance with the national policy goals.
Need for Review of National Mineral Policy of 1993
Mining is a three-stage operation, involving regional exploration, detailed exploration, and actual mining. Regional exploration is mainly a survey activity to identify areas bearing mineral deposits. Detailed exploration is a little more invasive and can involve close spaced drilling (depending on the mineral) and substantial testing to establish commercially exploitable ore bodies. Mining projects, therefore, have a long gestation period requiring large investments in exploration and other development activities before commercial production can begin, and are thus considered as a high risk venture for the reason that a prospector’s investment may or may not result in finds of commercially exploitable deposits. In India, investment has been lacking in such high-risk ventures and the exploration done by Geological Survey of India (GSI) continues to be the main basis for investment in mining.