Explained | India’s mining policy shift - GPSgyan

Only about 10% of India's known underground treasures have been looked at so far. A new law called the Mines and Minerals (Development and Regulation) Amendment Bill, 2023, wants to involve private companies in finding important minerals hidden beneath the ground.

India’s mining policy shift
The Bill aims to attract private sector investment in exploring critical and deep­seated minerals

India’s mining policy shift


The government created a new rule called the Mines and Minerals (Development and Regulation) Amendment Bill in 2023. This rule wants private companies to dig deep underground and find special minerals, like lithium for electric cars. There are six important minerals on a list in the rule. These minerals are really important for the country's plans. Before, only the government could use these minerals, but now private companies can also explore and dig them up.

Significance of India’s critical minerals:

  • India has a special way its land is formed and shaped, which is good for finding valuable minerals. These minerals are really important because they help create things, build stuff, and move forward.

  • In addition, countries like India want to use energy that doesn't make the air dirty and stop making too much pollution. But to do that, they need certain minerals like cobalt, graphite, and special elements found in the Earth's crust. These minerals are also used to create small parts for computers, gadgets, and communication devices.

  • However, the issue is that India doesn't have enough of these minerals, so they have to buy them from other places. This can cause problems in getting these materials and might even lead to not having enough of them.

Need of private sector for critical minerals exploration:

  • Mineral exploration is like a treasure hunt beneath the earth's surface. Imagine searching for hidden gems underground! This process has several steps. First, people quickly look around to get a general idea (this is called Reconnaissance). Then, they search more carefully to find clues (known as Prospecting). After that, they explore more broadly (General Exploration) before conducting a thorough investigation (Detailed Exploration).

  • Lately, not many valuable minerals have been discovered in the country. The government has been mostly responsible for searching, as private companies weren't allowed to explore new mineral-rich areas in India for a while. These companies also lacked motivation to explore because the rewards for finding minerals weren't very enticing.

  • Exploration involves different tasks, like taking pictures from above, creating maps of the ground, and studying the chemicals in rocks. It's a complex and slow process, and it carries risks. That's because only a small number of the places investigated actually have enough minerals to be worth mining and making money from.

Global Experience:

  • In Australia, there are little mining groups known as junior explorers. They bravely use what they know and their money to dig underground and find valuable minerals.

  • Once they discover something precious, they can sell it to bigger mining groups. These big companies handle the job of making the discovery into a real mine that works.

  • This way, more companies help to look for minerals, which makes the whole process faster.

India’s mining policy and private sector participation

  • The MMDR Act is a law that controls mining in the country. It started in 1957 and has changed over time, with the latest changes happening in 2015, 2020, and 2021.

  • In 2015, the MMDR Act got updated. This update allowed private companies to join auctions to get licenses for mining and exploration. But there was a rule that only areas explored by the government could be auctioned, which made it tough for private companies to join.

  • This update also said that private companies could do exploration work. There's a group called the National Mineral Exploration Trust that helps with exploration. Private companies could be part of this group to explore different areas, but they still had some rules to follow.

How does the Mines and Minerals Bill 2023 aim to encourage private players?

  • The Mines and Minerals Bill 2023 has some rules about mining rocks and minerals. It says that there are some special rocks called atomic minerals that cannot be mined easily. The Bill now says that six of these special rocks can be mined, even though before they couldn't.

  • The Bill also has rules for when people want to search for these minerals underground. People are not allowed to dig pits, make trenches, drill holes, or dig deep underground to find these minerals. But the Bill also says that these actions are okay if the government gives permission.

  • The Bill suggests a new way for private companies to explore for minerals. It talks about two different stages of looking for minerals. The first stage is called "reconnaissance," which means making maps and doing surveys. The second stage is called "exploration," where companies can dig and search for minerals in a certain area.

  • The Bill says that companies can explore an area up to 1,000 square kilometers in size with just one permission. After three years, if they want, they can keep a part of the land they were allowed to explore. But they need to tell the government why they want to keep it.

  • The Bill also gives the national government the power to organize auctions to let companies get permission to explore and mine certain important minerals.

Concerns with the Bill’s proposals:

  • Companies and experts have given advice about the new ideas and mentioned some problems.

  • A part of the money that miners give would be the main income for a private business that is allowed to explore.

  • The person doing the exploring wouldn't know exactly how much money they will make because they won't find out the auction amount until the mine is sold successfully.

Read also: The Inter Service Organization Bill 2023


India needs to bring in important minerals from other countries because it doesn't have enough of them. This has become a problem because sometimes the supply chain gets disrupted, and India has to rely on countries like China, Russia, and Australia. Now, there's a new rule that only the government can sell the minerals that explorers discover. The explorers will get paid sometime later. But in some other parts of the world, explorers can sell what they find directly to mining companies.

Nutshell paragraph: The 2023 amendment to the Mines and Minerals (Development and Regulation) Bill is about inviting private companies to invest money in finding valuable minerals deep underground. Earlier, India struggled to locate and use these minerals effectively because there weren't many private companies helping with the search. The new amendment aims to fix this by encouraging more companies to get involved.

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