MINES
AND MINERALS (DEVELOPMENT AND REGULATION) AMENDMENT BILL, 2023 – POLITY
News:
Explained | How does the
Mines and Mineral Bill 2023 plan to bring the private sector into mineral
exploration?
What's
in the news?
● Recently,
the Indian Parliament passed the Mines and Minerals (Development and
Regulation) Amendment Bill 2023, in a bid to attract private sector investment
in the exploration of critical and deep-seated minerals in the country.
Issues
around the Critical minerals:
1.
Arising need:
● Need
for critical minerals in the field of battery technology for electrical
vehicles makes those minerals imperative for green transition.
● These
are also crucial for the manufacture of semiconductors used in smart
electronics, defence and aerospace equipment, tele-communication technologies;
etc
2.
Availability issue:
● The
lack of availability of such minerals or the concentration of their extraction
or processing in a few geographical locations leads to import dependency,
supply chain vulnerabilities, etc.
3.
Vulnerable global supply chain:
● The
Russian invasion of Ukraine has made it more clear how global supply chains of
a range of commodities are vulnerable to shocks leading to a lack of
availability and skyrocketing prices.
4.
India's vulnerability:
● India’s
unique geological and tectonic setting is conducive to hosting potential
mineral resources.
● Its
geological history is similar to the mining-rich regions of Western Australia
and Eastern Africa.
● Still,
India is highly dependent on imports for a majority of 30 minerals of the
above-mentioned list.
● For
instance, India is 100% import-dependent on countries including China, Russia,
Australia, South Africa, and the US for the supply of critical minerals like
lithium, cobalt, nickel, niobium, beryllium, and tantalum.
● In
the case of lithium, India’s imports were worth $22.15 million in 2021-2022.
India imported 5,486.18 lakh units of lithium-ion batteries, spending $1,791.35
million.
● For
deep-seated minerals like gold, silver, lead, cobalt, platinum group elements
(PGEs), diamonds, etc., India depends largely on imports.
● These
minerals are difficult and expensive to explore and mine as compared to
surficial or bulk minerals.
● In
2022-23, India imported close to 12 lakh tonnes of copper (and its
concentrates) worth over Rs. 27,000 crores.
● It
imported 32,298.21 tonnes of Nickel worth Rs. 6,549.34 crore.
● India
has 6% of the world’s REEs reserves and produces only 1% of global output.
India's
attempt to secure critical minerals supply:
1.
Khanij Bidesh India Ltd. (KABIL):
● A
joint venture company namely Khanij Bidesh India Ltd. (KABIL) is to be set up
with the participation of three Central Public Sector Enterprises namely,
National Aluminium Company Ltd. (NALCO), Hindustan Copper Ltd. (HCL) and
Mineral Exploration Company Ltd. (MECL).
● The
Minister of Coal, Mines and Parliamentary Affairs Shri Pralhad Joshi said that
the objective of constituting KABIL is to ensure a consistent supply of
critical and strategic minerals to the Indian domestic market.
● While
KABIL would ensure mineral security of the Nation, it would also help in
realizing the overall objective of import substitution.
2.
Bilateral agreements:
● Bilateral
relationship with various countries to ensure uninterrupted supply of critical
minerals.
● For
example, in July 2022, the agreement between India and Australia on a
partnership for investing in critical minerals promises to be a fundamental
step in this path. (Australia was responsible for 49% of global lithium
production)
3. India's recent entry into the Mineral Security partnership to get a reliable and secure global
supply chain.
4. The Indian Ministry of Mines recently came out with
a list of 30 minerals critical to the country’s economic development and
national security.
How
does the Mines and Minerals Bill 2023, help in this context?
● The
Bill six previously mentioned atomic minerals (lithium, beryllium, niobium,
titanium, tantalum and zirconium) from a list of 12 which cannot be
commercially mined (reserved for government entities).
○ These
six minerals are now being put into a list
of “critical and strategic” minerals.
● The
Bill allows prohibited activities
under the Act like pitting, trenching, drilling, and sub-surface excavation as
part of reconnaissance, which included mapping and surveys.
● The
Bill also proposes a new type of license
to encourage reconnaissance-level and or prospective stage exploration by the
private sector.
● This
exploration licence (EL), for a
period of five years (extendable by two years), will be granted by the state
government by way of competitive bidding.
● This
license will be issued for 29 minerals specified in the Seventh Schedule of the
amended Act, which would include critical, strategic, and deep-seated minerals.
● It
also specifies the maximum area for
exploration - activities in up to 1000sq.kms will be allowed under a single
exploration licence.
Some
Issues with the Bill’s Proposals:
● A
process could take years to materialise owing to government timelines for
clearances or may not happen at all considering the complexity of the deposit
and geography.
● The
explorer would not know how much revenue they will receive as the auction
premium would be known only when a mine is successfully auctioned.
● Only the government can auction what
an explorer has discovered and the latter would only get a share of the premium
at an unknown stage.
● This
is unlike other global jurisdictions where private explorers can sell their
discoveries to miners.
● The
SC had observed (in 2012) that since big capital investments go into
discovering natural resources, companies would only spend big amounts if
they’re assured of utilising any discovered resources.