Driving Activity

Steps to encourage private participation in mineral exploration

In India, the focus of exploration has been on surficial minerals, such as coal and iron ore. Meanwhile, globally, the largest proportion of exploration spends are on gold, base metals (such as copper, lead and zinc), and diamonds. To boost India’s exploration activities, the government attempted to inspire private participation in exploration operations with the im­p­lementation of the New Mineral Exploration Poli­cy in 2016. In addition, the National Mineral Explo­ration Trust (NMET) was established to promote exploration and prevent unlawful mining.

The National Mineral Policy, 2019, is a step forward in the field of mineral exploration. The policy will encourage private players to conduct exploration activities by providing a right of first refusal at auctions, a simplified and transparent clearance process, and other relevant measures in accordance with worldwide practices.

Mines and Minerals (Development and Regulation) Amendment Act, 2021

The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), was amended through the Mines and Minerals (Develop­m­ent and Regulation) Amendment Act, 2021, which was notified on March 28, 2021, to boost mineral production, improve ease of doing business in the country and increase the contribution of mineral production to the GDP. Various simplifications were made in the exploration re­gime, such as making the NMET an auto­nomous body, allowing notification of private entities un­der Section 4(1) of the MMDR Act for conducting exploration, enabling funding of eligible private exploration agencies by the NMET, and establishing a seamless prospecting licen­cse-cum-mining lease (composite licence). Seve­ral modifications were also made in the exploration nor­ms to provide flexibility. These include: allowing the granting of mining leases for limestone, iron ore and bauxite with surficial deposits at the G3 level of exploration; allowing the reass­e­s­s­ment of re­so­urces for ex­pi­red, terminated, surrendered or la­p­s­­ed mines on the basis of available re­ports of exploration before auctions; allowing the auction of composite licences at the G4 level for all minera­ls; and establishing the definition of various sta­ges of exploration, exploration norms for different types of deposits, and reporting templates.

Government initiatives

The Indian government has taken a number of measures to enhance mineral exploration and mining activities in the country. As per the Dissemination Policy, 2019, of the Geographical Survey of India (GSI), all reports of mineral exploration, baseline data generation and fundamental geosciences are to be made available to all stakeholders through the GSI portal. Moreover, the GSI has taken up approximately 250 mineral exploration projects in 2021-22. During the year 2021 (till November), Mineral Exploration Cor­poration Limited (MECL) submitted 39 geological reports on different mineral commodities such as coal, lignite, copper, limestone, iron ore, manganese and magnesite, adding 10,414.36 million tonnes of resources to the national mineral inventory. Out of these 39 reports, 17 reports have been submitted to the NMET.

The government has signed MoU with Odisha Mineral Exploration Corporation Limited (OMECL), Bhu­ba­neswar, for carrying out detailed exploration and related works in Odisha. MECL has also signed an MoU with Central Mine Plan­ning and Design Institute (CMPDIL), Ranchi, for detailed energy and non-coal exploration in CMPDIL blocks. Furthermore, MECL has signed an MoU with the Directorate of Mines and Geo­logy (DMG), Goa, to expedite assessment of mineral resourc­es and take up exploration of mineral acreage to finalise mineral blocks for auctioning. Recent amendments such as the MMDR Amendment Act 2021; the Mineral (Auction) Second Amend­ment Rules, 2021; and the Minerals (Evi­dence of Mineral Contents) Amend­ment Rules will pave the way for states to expedite the auction process of their mineral acre­ages, making the role of the DMG, Gov­ernment of Goa, crucial in the process of ass­essment and allocation of their mineral acre­ages. MECL will analyse mineral resources by performing a variety of geoscientific explorations, as well as finalise the mineral blocks to be auctioned and establish the state’s mineral inventory, following the signing of the MoU. Meanwhile, the Karna­taka government has decided to release a grant of Rs 652.3 million to the Kudremukh Iron Ore Company and MECL to identify mining areas in the state.

Madhya Pradesh’s DMG and Madhya Pra­desh State Mining Corporation Limited have si­gn­ed an agreement to carry out exploration and related works for mineral acreages in Ma­dhya Pradesh. MECL will also carry out exploration of iron ore, sillimanite and rare earth elements in the districts of Nagaon, Karbi Anglong and Goal­para for the next five years. These initiatives re­pre­sent a turning point in India’s economic growth.

Future roadmap

The National Mineral Policy, which was implemented in 2019, presents significant investme­nt opportunities in India. Going forward, specialised venture capital-based exploration companies need to be incentivised to undertake deep exploration using advanced technologies. India’s mining sector is expected to undergo significant changes in the coming years as a result of schemes such as Make in India, the Smart Cities Mission and rural electrification, as well as increased infrastructure development.

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