The Indian Government has approved a new mining bill that will allow the country’s mineral resources to be auctioned through competitive bidding.
Following the amendments, foreign mining majors such as Rio Tinto will be able to venture into India’s market, boosting raw material supplies for steel and aluminium companies.
Changes to legislation were expected to be implemented through an ordinance last week, but the government chose to focus on land acquisition and arbitration. Officials said they were compelled to make a decision on the new ordinance, as opposition parties were blocking key initiatives in the Rajya Sabha.
A government source told PTI news agency: "The cabinet has approved promulgating an ordinance to auction iron ore and other minerals."
With the new ordinance in place, district mineral funds will also be created for the welfare of those affected by the project.
The Indian Government has defended this latest decision and said it was finding it difficult to allocate mines.
Previously, the Mines Ministry had failed to table a bill to amend the Mines and Minerals (Development and Regulation) Act 1957 during the winter session of parliament.
For the past few years, the sector has been struggling with issues such as ban and grappling with allegations of illegally allocating and exploiting reserves.
The new mining bill is intended to attract private investment and latest technologies in India.