Colombia - Ecuador - Costa Rica

Speech at Cartagena for the Mining Congress

         India with a population of over 1.1 billion and an economy growing close to 9 per cent in the past years, is in an extensive Endeavour to locate and exploit mineral resources for its energy and industrial needs.

         Shortly after independence, the Government of India intensified mineral exploration through the Geological Survey of India and the Indian Bureau of Mines, creating over the two decades from 1956 to 1973 several public sector corporations to exploit oil, coal, aluminum, zinc, copper and other minerals.  The Government structure is centered on the Ministry of Mines which administers the Mines and Minerals (Regulation and Development) Act of 1957, the Ministry of Energy manages the Department of Coal, while the Ministry of Petroleum and Natural Gas is responsible for the hydrocarbon sector.

         Several reforms have been undertaken to the Act of 1957.  In October 1996, an amendment to the Act ensured larger areas than the earlier limit of 25 sq. kms. for aerial prospecting and opened mining to foreign investment in the country. In June 2007, the Government of India permitted automatic 100 per cent foreign holding in the mining sector, excepting fuel and uranium mining.  In 2008, the National Mineral Policy further liberalized the issue of mining licenses subject to national interest and environmental concerns.  These steps were taken to encourage more private and foreign investment in an area in which the public sector of India contributes 85 per cent of production.

         India’s energy needs are colossal.  India imports 70 per cent of its crude oil requirements and 50 per cent of its natural gas.

         Coal provides about 60 per cent of the country’s energy requirements and accounts for about 40 per cent of the total mineral production of India.  In fiscal year 2006-07, India imported 10 million tons of coal.  Coking coal is also an important item of import.

         India is among the world’s leading producer of bauxite, bituminous coal, iron ore and zinc.  It also produces limestone, chrome ore, lignite, barytes, and manganese ore apart from smaller quantities of kyanite, dolomite, diamonds and gold.

         India’s immense energy requirements have necessitated import of increasing quantities of coal and oil for several decades, while West Asia has been the principal supplier of oil, in recent years India has been looking to Latin America and has been importing crude oil from Brazil, Venezuela, Mexico and Ecuador.  Given refinery compatibility, imports from Venezuela of heavy oil have also increased substantially and are expected to exceed US$ 2 billion in 2008.  Imports of crude oil from Ecuador in 2007 exceeded US$ 150 million.

         Although there has been no import of crude from Colombia, the State oil company, ONGC Videsh Limited is active here and seeks to increase its presence.  Similarly private companies such as Reliance also are looking at Colombia because of its openness and stable regime.

         Indian companies are considering Colombia as an attractive destination for investment for other minerals, in particular, iron ore, coal and ferro-nickel. 

         Latin America needs to be more active to attract investment by Indian companies which are not very conscious of the potential that exists here, although some companies such as Jindal Steel have already finalized a contract in Bolivia to exploit the gigantic Mutun iron ore mine, with an investment of over US$ 2 billion over the next 8 years.

         As Colombia continues to open up its mining sector and stabilizes the situation in areas where mining potential exists, it will find an increasing number of Indian companies interested in investing here.

         For its part, the Governments of India and Colombia are taking steps to create the juridical infrastructure to enable investments. We are close to finalizing a bilateral agreement for Promotion and Protection of Investments, and hope to start negotiations on a treaty to avoid Double Taxation shortly.

         High level political understanding between the two governments ensures that businessmen from both countries will find a positive environment and this already vibrant relationship will continue to grow and prosper for mutual benefit.