How has the Mining Policy of India improved over the years
About:
- Lithium, a mineral used in electric vehicle batteries and other energy storage technologies, is one of six minerals designated as “critical and strategic” minerals in the Bill. Only government-owned firms were permitted to conduct exploration and mining operations for these six minerals, which were traditionally classed as atomic minerals.
Import of India’s necessary minerals:
- Lithium, commonly referred to as “white gold,” and other essential minerals like cobalt, graphite, and rare earth elements (REEs) must be accessible for countries like India to accomplish the clean energy transitions required to meet their net-zero emission ambitions.
- In addition, they are crucial for the manufacturing of semiconductors, which are utilised in a variety of applications, including smart electronics, defence and aerospace equipment, telecommunications, and others.
- There is a greater reliance on imports as a result of the scarcity of these minerals or the concentration of their extraction or processing in a few number of locations, which exposes supply chains to risk and may even result in supply interruptions.
- According to statistics published by the Ministry, imports from countries like China, Russia, Australia, South Africa, and the United States are India’s only source of vital minerals including lithium, cobalt, nickel, niobium, beryllium, and tantalum.
- Deep-seated minerals, such as gold, silver, copper, zinc, lead, nickel, cobalt, platinum group elements (PGEs), and diamonds, are also heavily imported into India because it is more difficult and expensive to find and extract them than surface-level or bulk minerals.
Important mineral scouting:
- Mineral exploration is the first step in finding mineral deposits and, eventually, economically viable reserves. Mineral exploration takes place across a variety of stages prior to mining.
- The stages of exploration are categorised as G4 (Reconnaissance), G3 (Prospecting), G2 (General Exploration), and G1 (Detailed Exploration) in accordance with the United Nations Framework for Classification of Resources.
- The country spends less than 1% of the global budget on mineral exploration, and it is estimated that less than 10% of India’s Obvious Geological Potential (OGP) has been explored and less than 2% of it has been exploited.
- Less than 1% of examined prospects result in commercially viable mines, making exploration a highly specialised, time-consuming, and risky activity. It necessitates steps like geochemical analyses, geological mapping, and aerial surveys.
Restrictions for mining in India:
- The Mines and Minerals (Development and Regulation) Act (MMDR Act), the primary statute governing mining in the country, was enacted in 1957. Numerous changes have been made since then, most recently in 2015, 2020, and 2021.
- Later, private enterprises may use reconnaissance permits (RPs), prospecting licences (PLs), or mining leases (MLs) to request early-stage or greenfield exploration.
- In order to let private companies to participate in public auctions for mining leases and composite licences (CLs), the MMDR Act was changed in 2015.
- However, because only government-explored areas were put up for auction, the private sector was barred from taking part under the Evidence of Mineral Content (EMT) requirement.
- The modification allowed private businesses to register as exploring agencies and allowed the National Mineral Exploration Trust (NMET) to pay for G4 to G1 exploration, but private participation was still limited.
- First off, 12 atomic minerals that cannot be mined for a living are not included in the Bill, at least six of them have already been mentioned.
- Due to their inclusion on the list of atomic minerals, these six elements — lithium, beryllium, niobium, titanium, tantalum, and zirconium — were formerly only available to government organisations.
- Second, the Act outlaws reconnaissance activities like mapping and surveys that include digging trenches or digging underground. The Bill authorises these illegal actions.
- A brand-new licence type is also proposed in the bill to support private sector exploration at the reconnaissance level and/or potential stage.
- The State government will select the recipient of this exploration licence (EL), which will be issued after a competitive bidding process. The EL’s initial duration is five years, with a two-year extension option
Way Forward:
- Privatisation comes with the risk of monopolisation and black marketeering. Fraud and corruption are already commonplace in the mining sector. Therefore, a system with safeguards should be developed by the government.
- Nothing in the Bill ensures that public sector organisations would be given preference when allocating resources. Before distributing the remaining cash to private enterprises, the government must establish mechanisms for allocating monies to the public sector first.
