---

Mines and Minerals (Development and Regulation) Amendment Bill, 2023

Context:
The Mines and Minerals (Development and Regulation) Amendment Bill, 2023 (MMDR Amendment) was recently passed in Parliament, aiming to encourage private sector investment in the exploration of critical and deep-seated minerals in India.

Critical and Deep-Seated Minerals:

• Critical Minerals: These are essential for various industries such as technology, manufacturing, and clean energy (e.g., Lithium, nickel, cobalt).
• Deep-Seated Minerals: These minerals are found deep within Earth’s crust and pose challenges in terms of exploration due to their depth and associated costs (e.g., Gold, Copper, Diamonds).

Import Dependency:

• India heavily relies on imports for critical and deep-seated minerals.
• Minerals with 100% dependency include lithium, cobalt, nickel, niobium, etc.
• Minerals with very high dependency include copper, zinc, lead, gold, silver, etc.

India’s Status:

• India ranks as the 4th largest producer of iron ore and the 2nd largest producer of coal (as of 2021).
• It is also the second-largest producer of Aluminum.
• The demand for minerals is projected to increase by 3% in 2023, primarily driven by electrification and economic growth.

Challenges with Import Dependency:

• Overreliance on global supply chains makes India vulnerable to supply disruptions and price fluctuations.
• The cost of importing minerals is on the rise, impacting economic stability.

Need for Private Sector Participation:

• India possesses geological potential comparable to mineral-rich regions globally.
• Exploration activities have been limited, with less than 2% of available resources mined.
• Private sector involvement in mineral exploration is currently limited.
• Specialized techniques are required for effective mineral exploration.

MMDR Amendment Bill, 2023: Key Provisions

• The bill grants permission for private sector entities to mine 6 atomic minerals.
• A new exploration license (EL) is introduced to facilitate private sector participation in exploration.
• The bill defines the maximum exploration area, which can be up to 1,000 square kilometers.
• The central government is empowered to conduct auctions for critical and strategic minerals.

Issues and Concerns:

• Revenue generation may be delayed due to lengthy government clearance procedures.
• Exploration phase may be uncertain in terms of revenue.
• Complexity in auctioning exploration licenses might pose challenges.
• Government control over mineral discoveries could impact private explorers’ interests.
• Investment assurance is hampered by the uncertainty in utilizing findings.

Ministry of Mines’ List:

• The Ministry of Mines has identified 30 minerals critical for economic development and national security.

---