India pushes for exploration of critical minerals

The government has placed before the Lok Sabha an amendment to the Mines and Minerals Development and Regulation Act facilitating the production of deep-seated minerals and those critical to India's transition to net-zero emissions.

The act introduces an idea of exploration licences while also de-reserving 6 minerals such as lithium used in application in space technology, electronics, batteries amongst others. "The future global economy will be underpinned by technologies that depend on minerals such as lithium, graphite, cobalt, titanium, and rare earth elements," said the Ministry's statement of purpose.

The bill comes on the back of a comprehensive list of 30 minerals identified last month by the Mines Ministry as critical to India's future need in defence, agriculture, energy, pharmaceutical, telecom sectors. This exercise is particularly important in the context of India's shift to cleaner energy and clean energy technologies that will be dependent on these minerals, and given China's dominant control of their supply chain. A policy for critical minerals is also likely to follow.

The Narendra Modi government in 2015 changed how mineral resources were allocated in the country through auction with the company offering the biggest revenue share as premium to the state government winning mining rights. Pursuant to this, the act was amended in 2016, 2020 and 2021 to amongst other changes, bring parity between merchant and captive grants, to transfer clearances, and to free up areas that had been promised to companies in the past.

However, with little knowledge of India's reserves of deep-seated minerals such as gold, silver, copper, zinc, lead, nickel, cobalt, platinum group of minerals, diamonds auctions of these were difficult. Today's bill proposes 'exploration licences' that will also be granted through auction to the agency willing to accept the least share of premium when the deposit, after reconnaissance and prospecting, is eventually auctioned.

With this amendment private sector players will also be allowed to mine beryl, lithium, niobium, titanium, tantallium and zirconium that had been reserves for the public sector in the past. The bill also empowers the central government to auction mining leases and composite licences for certain critical minerals. The respective state to whom the premium and other statutory payments will accrue, will grant the lease.

The Seventh Schedule which specifies the minerals for which an exploration licence may be granted.