New Mines and Minerals Bill proposed to boost critical minerals exploration and mining

The government has put forth the Mines and Minerals (Development and Regulation) Amendment Bill, 2023, seeking to usher in significant reforms in the mineral sector. The proposed amendments aim to increase exploration and mining of critical and deep-seated minerals, which are crucial for economic development and national security. This move is aligned with India's commitment to energy transition and achieving net-zero emissions by 2070.

The existing Mines and Minerals (Development and Regulation) Act, 1957 underwent comprehensive amendments in 2015, 2016, 2020 and 2021 to introduce various reforms. These changes included the use of auctions for granting mineral concessions, establishing District Mineral Foundation for welfare, and imposing stringent penalties for illegal mining. However, the government believes that additional reforms are necessary to address the growing demand for critical minerals.

Exploration license for critical and deep-seated minerals

One of the major reforms proposed in the Mines and Minerals Amendment Bill, 2023 is the introduction of an exploration license specifically for critical and deep-seated minerals. The exploration license will be granted through auction, allowing the licensee to undertake reconnaissance and prospecting operations for minerals listed in the newly proposed Seventh Schedule to the Act. Notably, deep-seated minerals such as gold, silver, copper, zinc, lead, nickel, cobalt, platinum group minerals and diamonds are challenging and expensive to explore and mine.

To encourage private sector participation in mineral exploration, the exploration agency will be entitled to a share in the auction premium payable by the mining lease holder. This reform aims to reduce India's dependence on imports of these critical minerals and facilitate domestic production.

Omission of atomic minerals from Part B of the First Schedule

The Bill also proposes to remove six critical minerals, namely beryl and other beryllium-bearing minerals, lithium-bearing minerals, niobium-bearing minerals, titanium-bearing minerals and ores, tantalum-bearing minerals, and zirconium-bearing minerals and ores from the list of atomic minerals specified in Part B of the First Schedule to the Act.

Currently, their exploration and mining are reserved for government entities due to their inclusion in the list of atomic minerals. By removing them from the list, exploration and mining of these minerals will be opened up for the private sector, which is expected to significantly increase production and reduce dependency on imports.

Central government empowered for exclusive auction of certain critical minerals

The proposed Bill empowers the central government to exclusively auction mining leases and composite licenses for certain critical minerals listed in new Part D of the First Schedule. This move is aimed at expediting the auction process and ensuring early production of these essential minerals. However, it is important to note that even if the central government conducts the auction, the mineral concessions will be granted to the selected bidders by the respective state governments, and the auction premium and other statutory payments will accrue to the state governments.

Conclusion

The Mines and Minerals (Development and Regulation) Amendment Bill, 2023 represents a significant step towards boosting the exploration and mining of critical minerals in India. By encouraging private sector participation and removing restrictions on certain minerals, the government aims to achieve self-sufficiency, promote economic growth and strengthen national security. The proposed Bill is now awaiting debate and approval in Parliament, where lawmakers will assess its potential impact on the country's mineral sector and the overall economy.