Mines and Minerals Amendment Bill passed in Rajya Sabha

The Rajya Sabha has passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2023 for making amendments to the Mines and Minerals (Development and Regulation) Act, 1957. The Bill was passed by the Lok Sabha on July 28, and will now be sent to the President of India for assent. The Bill amends the Mines and Minerals (Development and Regulation) Act, 1957 which regulates the mining sector. One of the major reforms proposed in the Bill is to introduce exploration licences for deep-seated and critical minerals. Deep-seated minerals, such as gold, silver, copper, zinc, lead, nickel, cobalt, and platinum group of minerals, diamonds are difficult and expensive to explore. Replying to a brief discussion over the Bill, Parliamentary Affairs Minister Pralhad Joshi described the Bill as a game changer for the mining sector. He said it was necessary because the country relies on imports of various precious and critical minerals including lithium and cobalt. He said, to become the third largest economy in the world, India needs exploration of these minerals. Mr. Joshi said this Bill will bring more transparency in the mining sector. He criticised the previous UPA government policies for irregularities in the mining sector. Initiating the discussion, Sasmit Patra of BJD supported the Bill saying that it is crucial for the mining sector. He said the removal of six minerals from the list of 12 atomic minerals list, will allow a significant increase in the exploration of these minerals. The MMDR Act, 1957 was comprehensively amended in 2015 to bring several reforms in the mineral sector, notably, mandating the method of auction for grant of mineral concessions to bring transparency in the allocation of mineral resources, establishing District Mineral Foundation (DMF) for the welfare of the people and areas affected by mining and for establishing National Mineral Exploration Trust (NMET) to give thrust to exploration and for ensuring stringent penalty for illegal mining. The Act was further amended in 2016 and 2020 to address specific emergent issues and was last amended in 2021 to bring further reforms in the sector, such as, removing the distinction between captive and merchant mines, transfer of statutory clearances to ensure continuity in mining operations even with change of lessee, removing the restrictions on transfer of mineral concessions, lapsing of rights of non-auctioned concession holders which have not resulted in mining leases to ensure that concessions to private sector are only granted through auction etc. However, the mineral sector required certain reforms particularly for increasing exploration and mining of critical minerals that are essential for economic development and national security in the country. The lack of availability of the critical minerals or the concentration of their extraction or processing in a few geographical locations may lead to supply chain vulnerabilities and even disruption of supplies. The future global economy will be underpinned by technologies that depend on minerals such as lithium, graphite, cobalt, titanium, and rare earth elements. Critical minerals have gained significance in view of India’s commitment towards energy transition and achieving net-zero emissions by 2070. The Bill provides to remove certain minerals from the list of atomic minerals, viz. minerals of lithium, beryllium, titanium, niobium, tantalum and zirconium are technology and energy critical having use in the space industry, electronics, technology and communications, energy sector, electric batteries and are critical in net-zero emission commitment of India. Demand for minerals like lithium used in lithium-ion batteries is likely to increase manifold as the focus shifts towards clean energy. Currently, the country is dependent on imports for most of these important minerals as there is not much exploration or mining of these minerals due to existing legal provisions. These minerals have high economic importance and considerable supply risk due to geo-political uncertainties. Upon removal of these minerals from the list of atomic minerals, exploration and mining of these minerals will be open to the private sector. As a result, the exploration and mining of these minerals is expected to increase significantly in the country. Another major amendment passed by the Parliament is to empower the Central Government to exclusively auction mining leases and composite licences for certain critical minerals viz. molybdenum, rhenium, tungsten, cadmium, indium, gallium, graphite, vanadium, tellurium, selenium, nickel, cobalt, tin, platinum group of elements, minerals of “rare earth” group (not containing Uranium and Thorium); fertilizer minerals such as potash, glauconite and phosphate (without uranium) and minerals being removed from the list of atomic minerals. The Bill introduces provisions for the grant of a new mineral concession, namely, Exploration Licence (EL), in the Act. The exploration licence granted through auction shall permit the licensee to undertake reconnaissance and prospecting operations for critical and deep-seated minerals mentioned in the newly proposed Seventh Schedule to the Act.