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Mines and Minerals (Development and Regulation Amendment) Bill, 2023

  • Published
    29th Jul, 2023

The government pressed ahead with its legislative agenda in the monsoon session of Parliament, getting Lok Sabha approval for the Mines and Minerals (Development and Regulation Amendment) Bill, 2023 which seeks larger participation of the private sector in mineral exploration and production, including that for sought-after lithium.

Key-highlights of the Bill

  • The Bill amends the Mines and Minerals (Development and Regulation) Act, 1957.  The Act regulates the mining sector.  
  • Out of restrictions: The reform initiative in the Bill brings lithium out from the list of restrictive atomic minerals where permission to mine could only be granted by the Centre to government companies.

India’s Mining Industry

  • Mining industry plays a crucial role in the country's economy, serving as the backbone for manufacturing and infrastructure sectors.
  • According to the Ministry of Mines, the total value of mineral production (excluding atomic and fuel minerals) during 2021-22 amounted to Rs 2,11,857 crore, indicating an impressive increase of approximately 31.96 percent compared to the year before.
  • Welcomed private players: The change would allow auction of this critical mineral, used extensively for making batteries for electric vehicles, by the private sector.
  • Forestry clearance process: The amendment Bill will also dispense with the cumbersome forestry clearance process for mine reconnaissance and prospecting operations, making it easier for the private sector to participate in exploration of the country’s mineral resources.
  • Auction power: The Bill empowers the central government to exclusively auction mining lease and composite exploration licence for certain critical high value minerals such as gold, silver, platinum and copper.
  • Exploration licence: One of the major reforms proposed in the Bill is to introduce exploration licence for deep-seated and critical minerals. The exploration licence granted through auction will allow the licencee from private sectors to undertake “reconnaissance” and prospecting operations for critical and deep-seated minerals.

Reconnaissance operations are defined as operations undertaken for preliminary prospecting and includes: (i) aerial surveys, (ii) geophysical, and (iii) geochemical surveys. It also includes geological mapping.

  • Composite mineral licence: The reform proposals in the amendment legislation also include allowing states to grant composite mineral licence without having to get central nod.
  • Fixing mineral-wise maximum area: It will also raise and fix mineral-wise maximum area limits for mineral concessions to provide larger and economically viable mines to investors.
    • For prime minerals such as iron ore, the maximum area for prospecting licence and mining lease has been doubled to 50 sq. km and 20 sq. km respectively.
    • This would allow private entries to get same land area for mining as was earlier being given to government companies and that also by the state governments itself without any need for central approval.

Critical and strategic minerals

  • The amendment has now proposed to bring 8 of 12 atomic minerals , into a new category called critical and strategic minerals, including
    • lithium bearing minerals
    • zirconium bearing minerals
    • beach sand minerals
    • titanium bearing minerals
    • minerals of rare earth group containing uranium and thorium

What are Critical Minerals?

  • Critical minerals are elements that are the building blocks of essential modern-day technologies, and are at risk of supply chain disruptions.
  • These minerals are now used everywhere from making mobile phones, computers to batteries, electric vehicles and green technologies like solar panels and wind turbines.
  • Based on their individual needs and strategic considerations, different countries create their own lists.

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.

Recent government interventions

  • Mineral Security Partnership (MSP): India joined Mineral Security Partnership (MSP),a US-led collaboration that aims to catalyse public and private investment in critical mineral supply chains globally.
    • The MSP includes Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, UK, the European Commission, Italy, and now India.
  • Identification of critical minerals: Recently, the Centre has identified ‘30 critical minerals’, which are essential for 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.
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