National Mineral Policy 2006 - Department of Mines

as in other sectors. With the formulation of the NMP in 1993 there was a slight easing up andFDI was allowed upto 50 per cent with no limit on captive mines. Additional FDI could alsobe allowed on a case-by-case basis. All FDI proposals required clearance by the ForeignInvestment Promotion Board (FIPB). In 1997, FDI upto 50 per cent was taken out of thepurview of the FIPB and put on automatic approval route. For exploration and mining ofdiamonds and precious stones FDI was allowed up to 74 per cent under automatic route inFebruary 2000. In February 2006, the mining sector was opened up to 100 per cent FDI.1.11 Mining is a three-stage operation, involving regional exploration, detailed exploration,and extraction (or mining proper). The first two, taken together, are also covered under thegeneric term ‘prospecting’. In India, the term ‘reconnaissance’ is used to cover the regionalexploration phase of prospecting. Mine development, which precedes extraction, is treated asa part of mining, as this work starts only after the ML is granted. Regional exploration ismainly a survey activity to identify areas bearing deposits through such means as geologicaland theme (geophysical and geochemical) mapping, aerial photography, satellite imagery,topographic and underground surveys, and some very limited geophysical exploration withsample drilling. The GSI conducts regional exploration in four phases, known as P1, P2, E1,and E2, which are distinguished mainly by the intensity of geophysical and geochemicalsurvey. As compared to regional exploration, detailed exploration is more intensive. Unlikeregional exploration, detailed exploration is invasive and involves close distance drilling,including slim hole drilling, large-scale mapping, and very substantial geophysical andgeochemical testing to establish economically recoverable ore bodies. The last phase ofregional exploration, viz. E2, overlaps with the first phase of detailed exploration in someways. Mining involves mine development (i.e. earthwork to access ore bodies) andextraction. Thus, mining projects, especially large ones, have a long gestation period andlarge amounts are spent in detailed exploration and other development activities beforecommercial production can begin.1.12 Prospecting, i.e. regional exploration and detailed exploration, is a high risk ventureinasmuch as the prospecting agency has to spend considerable amounts on activities that mayor may not result in finds of commercially exploitable deposits. Domestic entrepreneurstypically lack adequate financial and technical resources for entering into such high-riskventures. This became clear as investment in prospecting by the private sector failed tomaterialise despite the reforms in policy and statute opening up the sector to private9