With an increasing coal demand that outstrips the supply, India is seen as having big coal mining potential for foreign companies, but significant hurdles still stand in the way because of ambiguous mining approval processes and licensing phases.

 

Speaking at the Austmine 2007 conference, Moignard said it can currently take up to 77 steps to get a mining lease in India, but that patience and persistence is key, as the country undergoes a transformation driven by changes in infrastructure and a growing demand for steel.

 

According to the National Steel Policy, Indian steel production is set to rise from the present 40 million tonnes to 110Mt in 2011-12.

 

Moignard believes that in 12 to 18 months time, we could be seeing a very different Indian mining market following changes from the Government based on recommendations from the Hoda report, which looked into the regulations and obstacles of the mining industry in India.

 

“[The] mining sector could become much more important to the Indian economy in the years to come if some of the changes that we’re now starting to see come to fruition,” Moignard said.

 

Overall concerns from the Hoda report – which was released in November last year and is currently under consideration with the Central Government in New Delhi – were removing ambiguity and speeding up permit applications.

 

According to Moignard, one of the reasons mining companies find it difficult to decide whether to invest in the subcontinent is that there are no automatic rights to go from a prospecting licence to an exploration licence to a mining lease.

 

Additionally, some of the 28 states have a processing focus where, for example, if a company is mining coal, the states require a power plant to be built.

 

“For mining companies, that is not their core business,” Moignard said.

 

Also in the state’s charge are the environmental and tribal clearances, and with a myriad of contact points to get a mining lease, foreign investors would be forgiven for just chucking in the towel.

 

However, the path can be smoothed out as has been done before with other sectors such as automotives, electronics and white goods.

 

Processes and permits are relatively smoother in those industries, and Moignard believes it won’t be too long before the same is applied to the somewhat stifled mining industry.

 

In the meantime, until those recommendations come into force, Moignard gave some tips to meeting the challenges.

 

“Make sure, if you have the ability, set up your own presence or make sure that you carefully choose your joint venture partner. It’s probably the most important decision you’ll make in your time in India,” Moignard said.

 

“Also realistic projections about how long it will take you to develop your project and to bring it through to a conclusion.”