Editor: Bruce Meng NEW DELHI, Oct 14 - India's new mining policy, moving with glacial speed towards implementation, may be too little too late to attract much foreign investment as the commodities boom fades and interest in minerals wanes. The turmoil in world financial markets and the consequent reduction in risk appetite, high borrowing costs and likelihood of a slowdown in demand for industrial raw materials means few companies want to risk developing projects abroad. And India, where legendary red tape has deterred foreign and even domestic private investment for years, will remain low on the list, even if the government finally passes legislation to help cut through the bureaucracy. "The motivation to invest will be a little less now given that commodity prices have come down worldwide," said Rakesh Arora, associate director at Macquarie Securities India office. Only 10 percent of Indian territory has been explored for its mineral wealth, and industry officials say this is largely due to the mass of paper work involved. Analysts have said that India and surrounding countries could see huge mining and exploration investment over the next 50 years as reserves in countries such as South Africa and Chile start to dwindle. India is estimated to have 2.92 billion tonnes of bauxite, the raw material for aluminium, or some 10 percent of world reserves. It is also estimated to have 23 billion tonnes of iron ore deposits and 276 billion tonnes of coal. Under new guidelines, delayed nearly two years, foreign and domestic firms should find it easier to invest in exploration and mining of gold, diamonds and metals like copper and zinc. Prospecting companies will automatically obtain a mining licence. But even if the guidelines are passed, implementation may be a challenge. "It might get a bit diluted because of the various factions, which are really pulling from both sides," said Arora. Indian mining industry officials say they expect the policy to figure in the budget session of parliament in February. The policy draft says that while state firms would continue to work on exploration and survey of minerals, the government would give more encouragement to private sector investment. "The emphasis has to be to make mining more marketable by itself," said A.S. Feroze, an independent steel analyst. But he added that the policy still encouraged captive mining by metal firms. LOCAL HURDLES Until now, overseas prospecting companies have avoided India because they could not sell the data they mapped, and could only utilise the information if they developed the resources themselves, which required massive capital. Investors also face resistance in states over acquisition of farming and forest land, a trend underscored by Tata Motors Nano project, which pulled out of West Bengal state, after protests by farmers unhappy with compensation over their land.