National Mineral Exploration Policy - Bid blocks through auctions

Q.  Which of the following is/are true regarding National Mineral Exploration Policy?

1) About 5 percent of royalty will be set aside for National Mineral Exploration Trust.
2) All participants will now have to bid for mining blocks through an auction.
- Published on 30 Jun 16

a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2

ANSWER: Only 2
 
  • NMEP will pave way for auction of 100 prospective mineral blocks. It boosts India’s mining potential.
  • It allows private mining companies to carry out regional and detailed exploration of mining blocks.
  • Earlier, private explorers used to apply for mining leases which would then be given out on a first-cum-first-serve basis. The new policy does away with that and all participants will now have to bid for mining blocks through an auction.
  • About 2 percent of royalty will be set aside for National Mineral Exploration Trust.
  • The policy allows host states a share in revenue from mineral exploration. Revenue sharing model for exploration to be lump sum or an annuity basis payment.

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