Mineral Exploration - GS questions based on daily current affairs

1)   Which of the following is/are true regarding National Mineral Exploration Policy?

1) Private entities engaged in carrying out regional and detailed exploration would get a certain share in revenue, when the region is mined.
2) Of India’s entire Obvious Geological Potential (OGP) area, identified by GSI, only 10 per cent has been explored.

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

ANSWER: Both 1 and 2

Explanation:

  • One of the important features of NMEP is attractive provisions for private investment in the exploration sector.
  • NMEP has proposed that private entities engaged in carrying out regional and detailed exploration would get a certain share in revenue (by way of royalty or premium accruing to the State government) in mining operation from the successful bidder after the e-auction of the mineral block.
  • Selection of private explorer is proposed to be done through a transparent process of competitive bidding through e-auction. For this, reasonable areas or blocks for regional exploration will be earmarked or identified by the government for auctioning.
  • Of India’s entire Obvious Geological Potential (OGP) area, identified by GSI, only 10 per cent has been explored and mining is undertaken in 1.5-2 per cent of this area.
2)   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.

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

ANSWER: Only 2

Explanation:

  • 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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