INDIA Law and Practice Contributed by: Vishnu Sudarsan, Kartikeya Gajjala and Mehar Vasant, J Sagar Associates
5.4 Sources of Finance for Exploration, Development and Mining Mining activities undertaken by private compa - nies are ordinarily funded through a mix of equity and debt (domestic or foreign) from banks and non-banking financial companies. Project finance for mining is available based on the strength of the projected cash flows from the mining activity. 5.5 Role of Domestic and International Securities Markets in the Financing of Exploration, Development and Mining Mining companies in India may opt to finance exploration, development and mining by way of domestic or foreign equity investments, by avail - ing debt, by the issuance of debt instruments (such as debentures) and by listing their securi - ties on domestic and foreign stock markets. 5.6 Security over Mining Tenements and Related Assets Rule 25 of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 provides that the holder of a mineral concession may create an encumbrance over the concession. If the security interest over the encumbrance is enforced, the mineral conces - sion may be transferred only to such persons who meet all eligibility conditions required to be met by the transferor for the grant of the conces - sion. An application for the transfer of the con - cession may be made by the creditors enforcing the security interest. 6. Mining: Outlook and Trends 6.1 Two-Year Forecast for the Mining Sector Considering the abundance of minerals in India, the mining sector has huge economic potential and could play a crucial role in terms of its own
economic output and also in responding to the demands of other allied/dependent industries. In addition, the sector has the capacity to cre - ate millions of jobs directly and indirectly, which will be vital given the growing Indian population. The central government envisions doubling the production of important minerals in coming years, with a view to reducing import depend - ency. It intends to do so by allocating and regu - lating minerals in a transparent and sustainable manner, promoting the exploration and mining of deep-seated and critical minerals, and by attracting foreign investment to meet growing needs. To this end, recent years have witnessed a flurry of amendments to the legal framework for mining, indicating the authorities’ intent to rapidly and proactively address issues in the sector and facilitate smooth and timely project development. A similar level of alacrity is expect - ed to persist in the coming years. The mining sector has also been gradually adopting advanced technologies to improve operational efficiency and safety, while also practising sustainable mining practices such as waste management and investing in eco-friendly technologies. Mining companies are increasingly focusing on corporate social responsibility ini - tiatives, investing in local communities, educa - tion, healthcare and sustainable development projects. As the economy expands and as the demand for mineral resources grows, the challenge of balancing economic growth with environmen - tal sustainability will be ever more pressing. It is imperative that India charts the course of its economic development and mineral exploitation in a manner that is responsive to the dire and pressing demands for climate action, both pre - sent and future.
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