Vedanta Resources Limited founder and chairman Anil Agarwal wants India to work on a “lucrative policy” that will incentivise start-ups to take up junior mining, thereby creating more jobs and increasing the discovery of natural resources.
In a series of tweets, the billionaire industrialist said India needs to allocate a budget for junior mining. "Currently, the budget for junior mining across the globe stands at 37 percent, while in India, it is 0 percent," he said.
Data from S&P Global Market Intelligence, shared by Agarwal, showed that the share of junior miners in exploration increased from 26 percent in 2016 to 37 percent in 2021.
What is junior mining?
Mining companies are mostly divided into two categories — juniors and majors. A junior mining company is one with a low market cap and is typically engaged in the exploration of gold, silver, uranium or other elements and minerals.
The primary goal of a junior miner is to discover significant mineral deposits and develop mineral resources. Starting off as private companies, they often go public to raise capital for their different stages of exploration.
Why junior mining?
In his tweets, Agarwal said junior mining was a huge untapped market with the potential to boost the economy and create up to 20 million direct and indirect jobs.
“Indian geology is similar to Chile, Australia, Canada and South Africa, but we haven't reached mining potential like them,” he said.
Junior miners and explorers will help the country reduce dependence on imports and drive in new technology like drone surveys, robotics, wireless communications, geophysics and more, according to Agarwal.
Where does India stand in junior mining?
The Indian government passed the Mines and Minerals (Development & Regulation) Act 1957 amendment last year, which allowed private agencies to undertake mineral prospecting operations.
Following the amendment in March 2021, the new Act mandated setting up a National Mineral Exploration Trust (NMET) as a non-profit autonomous body.
"The NMET fund set up to propel mineral exploration will attract junior explorers who have the expertise and the technology to explore deep-seated minerals," Dinesh Gupta, former director general of Geological Survey of India, wrote in The Times of India.
However, the fund does not take care of policy obstacles in exploring minerals, he said.
In his tweet, Agarwal mentioned Prime Minister Narendra Modi's statement that said "we are a production-minded country, not a revenue-minded country". "With good incentives and strong policy, I have no doubt that we will revolutionise the mining and oil and gas industry, including rare-earth materials," he tweeted.
He went on to add that India's dream to becoming atmanirbhar will become a reality when it gives the highest priority to exploration. "This will reduce imports and save our foreign exchange. This is how America, Australia and Canada became developed countries," the Vedanta boss said.
First Published: Oct 14, 2022 5:58 PM IST