The mines ministry has allotted 30 mineral blocks for exploration to Mineral Exploration Corporation Ltd (MECL) to enhance confidence among private exploration agencies.
MECL will be given funds out of the National Mineral Exploration Trust (NMET) set up to boost exploration in the country.
The government expects to collect Rs 500 crore annually by imposing 2 percent royalty on miners for NMET, mines secretary Balvinder Kumar told ET. The government recently approved a national mineral exploration policy and sought to give 100 mining acreages to explorers.
If mineral reserves are established post exploration by MECL, the blocks will be handed over to states for auction. After auction proceeds are received, the funds given to MECL will be refunded to NMET, Kumar said.