Govt to pay 30% upfront in critical mineral exploration

 The Union government plans to make advance payments to private companies selected to scout for critical minerals to get work on these projects started quickly, a mines ministry document showed.

- Subhash Narayan

According to the ministry’s proposed scheme of engagement, 30% of the project cost would be paid upfront once the selected company, called a notified private exploration agency (NPEA), submits a bank guarantee equal to the value of the advance to the National Mineral Exploration Trust (NMET).

The guarantee should be valid for at least 60 days beyond the date of completion of the project and acceptance of the geological report by NMET. The guarantee will be released within 30 days of settling the advance payment.

Advance payments, a first in India’s mining sector, are expected to speed up the exploration of these minerals, in a country where mining remains dominated by public sector companies.

India recently permitted private companies to scout for 29 critical and deep-seated minerals including cobalt, lithium, nickel, gold, silver, and copper, which are hard to find and reach, compared with surface minerals or bulk minerals.