Centre may use PPP model for core facilities in mining

NEW DELHI: After its success in road and port projects, the government plans to introduce the public-private partnership (PPP) model for the development of infrastructure facilities required by small and medium enterprises (SME) in the mining sector.

As per the proposal, Mineral Infrastructure Development and Finance Corporations (MIDFC) would be set up to forge partnerships with mining companies for implementing infrastructure projects. These corporations would recommend viability gap funding (VGF) requirements for these projects and also provide bridge financing. The VGF support would be equally met by the government and the state-level mineral development fund.

���Iron ore and diamond mining in the country is dominated by the SME sector, which often faces problems in their projects due to poor infrastructure facilities. The PPP model has been suggested so that the state and the private sector work jointly to plug the problem and boost mining projects,��� a government source said.

The PPP model is also likely to form part of the New National Mineral Policy that would come up for cabinet approval soon. The state governments and the Central ministries have already given their nod for the proposal in their comments to the cabinet note, the source said.

The PPP model would be implemented once the royalty formula for major minerals shifts from the present fixed tonnage based royalty to ad valorem system.