Bill on mining sector reforms passed in Rajya Sabha, provides for 50-year production lease for offshore minerals

New Delhi [India]: Rajya Sabha on Wednesday passed a Bill for “reforms” in the mining sector, specially for increasing exploration and mining of critical minerals which are essential for economic development and national security in the country.

The Bill provides for a 50-year production lease for offshore minerals. The Mines and Minerals (Development and Regulation) Amendment Bill, 2023 was passed with a voice vote in the absence of opposition party members who staged a walkout from the House over their demands related to the debate over ethnic violence hit Manipur.

Opposition members staged a walkout minutes after the debate started on the Bill.
Eleven members participated in the debate on the Bill that seeks amendment to the Mines and Minerals (Development and Regulation) Act, 1957.

The Lok Sabha passed the bill on July 28.

Speaking on the Bill, Minister of Coal and Mines Pralhad Joshi said the Act regulates the mining sector and the Bill is very important in view of the global scenario relating to the mining sector.

One of the major reforms proposed in the Bill is to introduce exploration licence for deep-seated and critical minerals. The exploration licence granted through auction shall permit the licencee to undertake reconnaissance and prospecting operations for critical and deep-seated minerals mentioned in the newly proposed Seventh Schedule to the Act.

The blocks explored by the exploration licence holder would be auctioned for mining lease within the prescribed timeline, which will fetch better revenue to the State Governments.
The exploration licence will be issued for 29 minerals specified in the Seventh Schedule.

These include gold, silver, copper, cobalt, nickel, lead, potash, and rock phosphate.  These also include six minerals classified as atomic minerals under the Act such as beryl and beryllium; lithium; niobium; titanium; tantallium, and zirconium. The Bill declassifies them as atomic minerals.  Unlike other minerals, the prospecting and mining of atomic minerals is reserved for government entities under the Act.

The exploration licence will be granted by the state government through competitive bidding. The central government will prescribe details such as the manner of the auction, terms and conditions, and bidding parameters for exploration licences through rules.

The bill provides that exploration licence will be issued for five years. A licencee may request for an extension of up to two years by making an application to the state government.

The application may be made after three years of issuance of the licence but before its expiry.

The Bill adds that an auction for composite licences and mining leases for specified critical and strategic minerals will be conducted by the central government.

These minerals include lithium, cobalt, nickel, phosphate, potash, tin, phosphate, and potash.  However, concessions will still be granted by the state government.

The Bill allows activities under a single exploration licence in an area of up to 1,000 square kilometres.  After the first three years, the licencee will be allowed to retain up to 25 per cent of the originally authorised area.  The licencee must also submit a report to the state government stating reasons for retention of the area.