OFFSHORE
AREAS MINERAL (DEVELOPMENT AND REGULATION) AMENDMENT BILL, 2023 – POLITY
News:
Lok Sabha passes Bill to
provide fixed 50-year production lease for offshore minerals
What
is in the news?
● Recently,
the Offshore Areas Mineral (Development and Regulation) Amendment Bill, 2023
was passed in the Rajya Sabha.
Key
provisions of the Offshore Areas Mineral (Development and Regulation) Amendment
Bill, 2023:
1. Composite
license:
● The
Bill introduces a composite license for granting rights for exploration as well
as production.
● Under
the composite license, the licensee will be required to complete exploration
within three years.
● This
may be extended by two years upon application by the licensee.
● If
mineral resources have been established, the licensee will be granted one or
more production leases for the explored area.
○ Under
the act, three types of permits were given such as reconnaissance permit,
exploration license and production lease.
2. Validity of
concessions:
● The
Bill instead provides that a production lease, as well as a production lease
under a composite license, will be valid for 50 years.
○ Under
the Act, a production lease is granted for a period of up to 30 years.
3. Mandatory
auction:
● The
Bill mandates competitive bidding for a production lease and a composite
license to private entities.
○ The
Act provides for the grant of concessions through administrative allocation.
4. Mining in
reserved areas:
● The
Bill allows the administering authority to grant a composite license or
production lease to the government or a government company.
● Joint
ventures of government companies will also be eligible, subject to certain
conditions.
○ The
Act allows the government to reserve offshore areas that are not held under any
operating right.
5. Mining of
atomic minerals:
● The
Bill adds that in case of atomic minerals, exploration, production, and
composite licenses will be granted only to the government or government
companies.
6. Standard
area of block:
● The
Bill also limits the maximum area one entity can acquire under all concessions
to 45 minutes latitude by 45 minutes longitude.
○ Under
the Act, the size of one block for offshore mining is five minutes latitude by
five minutes longitude.
7. Offshore
Areas Mineral Trust:
● The
Bill sets up the Offshore Areas Mineral
Trust.
● Concession
holders will be required to pay an amount to the Trust in addition to any
royalty.
Importance
of the bill:
1.
Prevent illegal mining:
● The
Bill increased fines for illegal mining activities.
● This
can prevent illegal mining activities in the offshore areas.
2. Development
in mining areas:
● The
setup of offshore mineral trusts can provide development activities to the
vulnerable people who are living in the mining areas.
3. Atomic
minerals:
● The
act allocated atomic minerals mining to the government companies.
● This
will ensure that mining of atomic minerals will be used only for legitimate
purposes.
4. Mandatory
auction:
● The
Bill provides for the mandatory auction provision.
● This
will ensure the legitimate and ethical allocation of the mining areas.
5. Ease of
doing business:
● The
Bill increases the validity of the composite license to 50 years.
● The
ease of doing business in the mining sectors is ensured.