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Mineral exploration & the involvement in private sector

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  • Published
    11th Aug, 2023


Parliament passed a 2023 Bill allowing private sector involvement in exploring critical minerals like lithium, previously restricted to government entities.


Key-highlights of the Mines and Minerals Bill 2023:

  • The Bill amends Mines and Minerals (Development and Regulation) Act, 1957. 
  • Allowing commercial mining: The Bill omits at least six previously mentioned atomic minerals from a list of 12 which cannot be commercially mined.
    • Being on the atomic minerals list, the exploration and mining of these six- lithium, beryllium, niobium, titanium, tantalum, and zirconium, was previously reserved for government entities.
  • Empowering central govt: It empowers Central Government to exclusively auction mineral concessions for certain critical minerals.
  • Exploration licence (EL): The Bill also proposes a new type of license to encourage reconnaissance-level and or prospective stage ??exploration by the private sector. 
    • This license will be issued for 29 minerals specified in the Seventh Schedule of the amended Act, which would include critical, strategic, and deep-seated minerals.

What is the share of critical and deep-seated minerals that India imports?

  • Cobalt mines: China has majority ownership of cobalt mines in the Democratic Republic of Congo, where 70% of the world’s cobalt is mined.
  • Rare Earth Elements (REEs): China also has by far the largest amount of reserves of Rare Earth Elements (REEs) of any country in the world, followed by Vietnam, Brazil and Russia; it produces of 65% of the world’s REEs.

Rare Earth Elements (REEs):

  • There are 17 Rare Earth Elements (REEs) are cerium (Ce), dysprosium (Dy), erbium (Er), europium (Eu), gadolinium (Gd), holmium (Ho), lanthanum (La), lutetium (Lu), neodymium (Nd), praseodymium (Pr), promethium (Pm), samarium (Sm), scandium (Sc), terbium (Tb), thulium (Tm), ytterbium (Yb), and yttrium (Y).
  • REEs are classified as light RE elements (LREE) and heavy RE elements (HREE).
    • Some REEs are available in India — such as Lanthanum, Cerium, Neodymium, Praseodymium and Samarium, etc.
    • Others such as Dysprosium, Terbium, and Europium, which are classified as HREEs, are not available in Indian deposits in extractable quantities.

India’s position on Critical minerals:

  • REEs: Though India has 6% of the world’s rare earth reserves, it only produces 1% of global output, and meets most of its requirements of such minerals from China.
    • In 2018-19, for instance, 92% of rare earth metal imports by value and 97% by quantity were sourced from China.
  • Deep-seated minerals: Also for deep-seated minerals like gold, silver, copper, zinc, lead, nickel, cobalt, platinum group elements (PGEs) and diamonds, India depends largely on imports.
  • Indian Rare Earths Ltd (IREL) which is a Government of India Undertaking, and KMML, a Kerala State Government Undertaking are actively engaged in mining and processing of beach sand minerals from placer deposits.
  • In India, monazite and thorium is the principal source of rare earths.

What India is doing to strengthen its position?

  • 30 critical minerals: The Ministry of Mines, in June this year, came out with a list of 30 minerals critical to the country’s economic development and national security.
  • Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, PGE, Phosphorous, Potash, REE, Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium and Cadmium.
  • However, India is highly dependent on imports for a majority of minerals on this list.
    • India is 100% import-dependent on countries including China, Russia, Australia, South Africa, and the U.S. for the supply of critical minerals like lithium, cobalt, nickel, niobium, beryllium, and tantalum.
  • India-Australia Critical Minerals Investment Partnership: India and Australia recently decided to strengthen their partnership in the field of projects and supply chains for critical minerals. Australia will commit 5.8 million dollars to the three-year India-Australia Critical Minerals Investment Partnership.

Why India needs minerals?

  • Electric Vehicles: India has an ambitious plan to convert a large percentage of its transport to electric and this would require these minerals.
    • 80 percent of the country’s two- and three-wheeler fleet, 40 percent of buses, and 30 to 70 per cent of cars will be EVs by 2030.
  • Clean energy: They are critical for developing clean energy which is the need of the hour today.
  • Industrial use: Traditional uses like Cerium for glass polishing and lanthanum for car catalysts or optical lenses.
  • Manufacturing of magnets: neodymium, praseodymium and dysprosium, are crucial to the manufacture of magnets which are used in industries and also in wind turbines and Drones.

Why is private sector participation needed in the case of India?

  • Budget constraints: India has explored just 10% of its Obvious Geological Potential (OGP), less than 2% of which is mined and the country spends less than 1% of the global mineral exploration budget.
  • Breaking barriers: As of now, the exploration projects are carried out by Geological Survey of India and other PSUs like Mineral Exploration Corporation Limited (MECL), with very little private sector participation. 
  • Involvement of private agencies in exploration would bring
    • advanced technology
    • finance
  • Expertise in exploration: The proposed exploration licence regime is foreseen to create an enabling mechanism where in the exploration agencies will bring in expertise from across the world in geological data acquisition, processing and interpretation value chain and leverage the risk-taking ability for discovery of mineral deposits through adoption of expertise and technologies.


  • In Australia, private mining firms engage in risk-taking by putting their expertise and limited financials into explorations to find potential mines.
  • Once discovered, these private companies can sell these to bigger mining companies who then develop and run these mines.
  • This helps multiply exploration projects and accelerate the pace of exploration owing to private participation.

Recent international initiatives

  • Mineral Security Partnership (MSP): It aims to focus on the supply chains of minerals such as Cobalt, Nickel, Lithiumand also the 17 REEs. India is a party to MSP.
  • List: Countries like the U.S., Australia, Japan, and the EU bloc have also created lists of critical minerals based on their specific economic needs and the supply risk of the minerals.

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