- New policy expected to help reduce delays in getting licenses
- Deccan Gold surges 20% as NMDC advances to highest since May
Shares of Indian miners rallied after the cabinet approved a new mineral exploration policy that will cut the time needed for companies to get permission for exploration and allow them to receive royalties.
Prime Minister Narendra Modi’s cabinet gave a green light to the policy on Wednesday, said a government official, who asked not to be identified, citing official rules. The proposal needs parliamentary approval to become law. Deccan Gold Mines Ltd., the only listed gold miner, rallied 20 percent to a level not seen since August, while state-run iron ore miner NMDC Ltd. headed for the highest close since May. Vedanta Ltd. and Hindalco Industries Ltd. also rose.
Modi is seeking to overhaul business restrictions and revive the mining sector, which has been plagued by government red tape and delays in getting approvals. In March, the government gave the nod to an amendment that allowed the sale of captive mines -- those that produce minerals solely for their owners such as steel mills or power producers -- without going through an auction process.
India wants to open up mining of gems and precious metals and cut reliance on imports, Mines Secretary Balvinder Kumar said on June 14. The country is set to auction about 50 blocks for diamond and gold exploration in the fiscal year started April 1, out of a total of 100 blocks that also hold minerals such as iron ore, limestone, manganese and bauxite, he said.