Introduction:
On August 2, Parliament sanctioned the 2023 Amendment Bill for Mines and Minerals (Development and Regulation), targeting private investment in crucial minerals like lithium. Six minerals, previously under exclusive government control, are now classified as “critical and strategic,” involving the private sector in their exploration.
Body:
Provisions of the Mines and Minerals Amendment Bill, 2023:
- Private Sector Mining of Atomic Minerals: The Bill permits private sector mining of six atomic minerals (lithium, beryllium, niobium, titanium, tantalum, and zirconium) out of 12. The government can auction leases for vital minerals like gold, silver, copper, zinc, lead, and nickel.
- Auction for Exploration License: State governments issue exploration licenses through competitive bids, with the central government establishing auction rules, terms, and conditions.
- Maximum Permitted Area: The Bill allows exploration within 1,000 sq. km under one license, and after three years, licensees can retain up to 25% of the original area.
- Incentive for Exploration License: After confirming resources, the state must auction mining leases within six months, with the licensee receiving a share of the auction value for the discovered mineral.
Impact of mineral classification on resource management in India:
- Reduced Import Dependence: Classification as critical and strategic aims to decrease reliance on imports, with private sector involvement enhancing domestic production and reducing foreign supply risks.
- Supplier Diversification: Private sector participation encourages diverse exploration, reducing dependence on specific locations and mitigating vulnerability to supply chain shocks.
- Attracted Investment: Private sector engagement attracts local and international investment, aiding India’s critical mineral security.
- Domestic Industry Support: Developing a local critical mineral supply chain strengthens industries reliant on these resources, such as electric vehicle manufacturing.
- Long-Term Planning: Critical mineral classification promotes collaborative planning among government, industry, and research institutions, focusing on alternative sources, recycling, and substitutions.
Challenges related to Bill’s proposals:
- Revenue Timing Uncertainty: Private explorers may face prolonged waits for resource auctions, impacting revenue and creating uncertainty about timing and outcomes.
- Auction Suitability: Auctioning licenses for undiscovered resources poses challenges as the resource value is unclear during exploration.
- Investment Confidence: Companies may hesitate to invest if resource use cannot be guaranteed, as the Bill does not explicitly support the selling of discoveries to miners.
Conclusion:
India should encourage diverse exploration, research, and eco-friendly mining, backed by incentives, community support, and awareness. This approach promotes responsible mining, reduces imports, strengthens supply chains, and advances the economy and technology.
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