The Lok Sabha passed the Mines and Minerals (Development and Regulation) Amendment Bill on Friday in the monsoon session. It enables private companies to mine critical minerals like lithium, which was earlier limited to only state owned companies.
“The mineral sector requires certain more reforms particularly for increasing exploration and mining of critical minerals that are essential for economic development and national security in the country,” the bill read.
It proposes to insert the provision of an exploration license only for deep-seated and critical minerals in the law. This license will be granted through auction for undertaking reconnaissance and prospecting operations.
Having been approved by the Union Cabinet earlier this month, with the amended bill, companies will now be allowed to suggest areas they want to explore, and eventually mine in India, as per the changes. This is a deviation from the usual practice where blocks or mines are defined by the government to be taken up for auction.
Critical minerals have gained significance in view of India’s commitment towards energy transition and achieving net-zero emission by 2070.
Such minerals include copper, tellurium, selenium, lead, zinc, cadmium, indium, gold, silver, diamond, rock phosphate, apatite, potash, and elements of the rare earth group. Critical and strategic minerals such as lithium, cobalt, molybdenum, rhenium, tungsten, graphite, vanadium, nickel, tin, platinum group of elements, columbite, tantalite, lepidolite, scheelite and cassiterite are also part of the list.
The changes are likely to incentivise private sector participation in all spheres of mineral exploration, with a focus on precious and critical ones. It allows junior mining companies to get exploration rights on the basis of available baseline survey data. These companies explore the area from the reconnaissance stage and bring it up to the level required for starting mining operations.
As per an ET report, India currently has about 6,88,000 square kilometres of obvious geological potential areas, of which 1,97,000 sq km of high potential area has been identified by the Geological Survey of India.
It is estimated that only 1% of the global budget for mineral exploration is spent in India.
