The National Mineral Exploration Trust (NMET) to be set up by the government is likely to have a corpus of Rs 500 crore to begin with and within the next four years it would be doubled to Rs 1,000 crore, a senior Union mines ministry official has said.

Through the Mines and Minerals (Development and Regulation) (Amendment) Ordinance, 2015 promulgated this week, the government has announced setting up of the NMET, to promote more exploration of non-coal minerals and meet the growing needs of the domestic steel, aluminium, copper and other utilities. “We have suggested that a corpus of Rs 500 crore should be earmarked for NMET to begin with and double it within four years,” a senior mines ministry official told The Indian Express.

As per the ordinance, holders of mining leases or prospecting-cum-mining leases would pay to the NMET a sum equivalent to 2 per cent of the royalty they pay to the government.

The trust would utilise the money for fresh exploration. In effect, it would function similarly to the state-run Geological Survey of India (GSI) or its junior counterpart Mineral Exploration Corporation Limited (MECL). It is learnt that the Prime Minister’s Office has expressed concerns on the poor investment and inadequate exploration by the state-run firms, the official said. For example MECL has invested only Rs 9 crore for exploration activities.

The PMO is learnt to have asked the mines ministry to ensure that the provision of Rs 18.71 crore during 2014-15 for capital investment by MECL must be fully utilised. The mines ministry has asked GSI to expeditiously strengthen its manpower and deploy them to assess mineralisation in unexplored areas, the official said.

The mines ministry’s efforts to strengthen its exploration firms has gathered momentum following the steel ministry’s recent presentation to the PMO wherein it has said the total thermal coal requirement for steel, cement and aluminium sectors is approximately 200 million tonne, of which 40 million tonne is imported at a revenue outgo of Rs 500 crore each year.