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

Context: India’s Parliament passed a law allowing the government to auction and mine its newly  discovered reserves of lithium, among other minerals, increasing the mining of the critical input for EV batteries. 

The Mines and Minerals (Development and Regulation) Amendment Bill, 2023 amends the Mines and Minerals (Development and Regulation) Act, 1957.  

• The Act regulates the mining sector.  For regulation, the Act classifies mining-related activities into: 

1. reconnaissance, which involves a preliminary survey to determine mineral resources.
2. prospecting, which includes exploring, locating, or proving mineral deposits.
3. mining, the commercial activity of extraction of minerals.

Key features of the amendment bill:

1. Private sector involvement - It seeks grant of exploration licence to private sector players for deep-seated and critical minerals. 
2. Reconnaissance to include sub-surface activities:  The Act defines reconnaissance operations as operations undertaken for preliminary prospecting and includes: (i) aerial surveys, (ii) geophysical, and (iii) geochemical surveys.  It also includes geological mapping.  The Act prohibits pitting, trenching, drilling, and sub-surface excavation as part of reconnaissance.  The Bill allows these prohibited activities.
3. Exploration licence for specified minerals:  The Act provides for following types of concessions:

(i) a reconnaissance permit for reconnaissance, 

(ii) a prospecting licence for prospecting, 

(iii) mining lease for undertaking mining, and 

(iv) a composite licence, for prospecting and mining.  

The Bill introduces an exploration licence, which 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:

(i) beryl and beryllium, (ii) lithium, (iii) niobium, (iv) titanium, (v) tantallium, and (vi) 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.

4. Exclusive auction mining lease to centre - It empowers the central government to exclusively auction mining lease and composite licence for certain critical minerals.
5. Time limits - Blocks explored by the exploration licence holder would be auctioned for mining lease within a prescribed timeline.

Merits:

• Rationalization of minerals - Many of the minerals listed as atomic minerals have numerous non-atomic applications in space industry, electronics, technology and communications, energy sector, electric batteries etc. In most cases, the non-atomic uses of these minerals far outweigh their atomic use. Many such minerals are not fissile or radioactive in nature. 
• Reduced financial burden on government - Deep-seated minerals such as gold, silver, copper, zinc, lead, nickel, cobalt, platinum group of minerals, and diamonds are difficult and expensive to explore and mine hence involving them may reduce the financial burden on government.
• Geopolitical advantage – It may reduce the dependence of India over the imports of such minerals thereby reducing the relative geopolitical vulnerabilities.
• Increase in efficiency - Only 19 blocks of minerals have been auctioned so far by the State Government viz. graphite, nickel and phosphate out of 107 blocks handed over to the various State Governments. As these critical minerals are vital for the growth of our economy, authorizing the Central Government to auction concession for these critical minerals would increase the pace of auction and early production of the minerals.
• Innovation in mining - Private participation will improve the scope of mining and innovation in this sector. 
• Improving revenue to states - Timebound auctioning will help state to have better revenues.
• Boost to manufacturing- Reducing the government monopoly will eventually bring competition in this sector boosting the mining of such minerals which are very critical when it comes to E.V manufacturing, chip industries etc. 

Issues involved :

1. Private participation may lead to misuse, irresponsible and excessive mining. This can have several detrimental socio-environmental implications.
2. Already stressed Public sector undertakings may further take the backseat. 
3. Issue of federalism because of exclusive right to centre to auction mining lease.
4. The Bill also dispenses with cumbersome forest clearances for mine reconnaissance and prospecting operations. This may affect the ecology of the concerned region.