The new rules in Mining sector promise to usher in more private involvement. An update.
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- The story: The government has notified the new Minerals (Evidence of Mineral Contents) Second Amendment Rules, 2021 and the Mineral (Auction) Fourth Amendment Rules, 2021.
- What they do: These two will amend the Minerals (Evidence of Mineral Contents) Rules, 2015 [MEMC Rules] and the Mineral (Auction) Rules, 2015 [Auction Rules], respectively. The Lok Sabha and Rajya Sabha both cleared the Mines and Minerals (Development and Regulation) (MMDR) Amendment Bill, 2021.
- Minerals (Evidence of Mineral Contents) Rules, 2015: It has been amended in June, 2021 to provide for auction to grant a composite licence in respect of areas where at least Reconnaissance Survey (G4) level has been completed or where mineral potentiality of the block has been identified based on the available geoscience data but resources are yet to be established.
- A Reconnaissance Survey provides a snapshot of potential historic resources in a particular location at a specific point in time.
- These amendments were aimed at identifying more mineral blocks for auction and thereby increasing the pace of exploration and production resulting in improving the availability of minerals in the country and increasing employment in the sector.
- Mineral (Auction) Rules, 2015: It was amended to prescribe bid security, performance security and other eligibility conditions to enable auction of such blocks for composite licence. The Geological Survey of India (GSI) has also made available the database of baseline geoscience data for geological potential areas in the Online Core Business Integrated System Project (OCBIS) portal for assistance of prospective bidders and other stakeholders.
- Minerals (Evidence of Mineral Contents) Second Amendment Rules, 2021: It will enable any person (who is intending to participate in auction) to propose suitable blocks for auction for composite licence where mineral potentiality of the blocks has been identified based on the available geoscience data. A committee constituted by the State Government shall assess the mineral potentiality of the blocks so proposed and recommend the block for auction.
- Mineral (Auction) Fourth Amendment Rules, 2021: It would provide that in case the blocks proposed by any person are notified for auction, the said person would be provided incentive of depositing only half of the bid security amount in auction of the blocks proposed by him. Part surrender of mining lease area has been allowed in all cases. Till now, part surrender was allowed only in case of non-grant of forest clearance. Provisions have also been added to allow disposal of overburden/ waste rock/ mineral below the threshold value, which is generated during the course of mining or beneficiation of the mineral. Minimum area for grant of mining lease has been revised from 5 ha. (hectares) to 4 ha. For certain specific deposits, minimum 2 ha. is provided.
- Goals: The idea is to identify more mineral blocks for auction and thereby increase the pace of exploration and production resulting in improving the availability of minerals. It may encourage more participation in auctions and promote competition.
- Other steps in past: Many policies and laws were made, inluding (i) The National Mineral Policy 2019, (ii) Initiatives to ensure early operationalisation of auctioned greenfield mineral blocks, (iii) Rationalisation of taxes in the mining sector being considered, (iv) Atmanirbhar Bharat scheme, enhancing private investments in the mineral sector, and (v) the District Mineral Foundation Funds.
- Minerals in India: India's rich mineral resources have been explored, and over 20,000 known mineral deposits found with recoverable reserves of more than 60 minerals. 11 states account for 90% of the total number of operational mines (Andhra Pradesh, Odisha, Chhattisgarh, Jharkhand, West Bengal, Maharashtra, Tamil Nadu, Gujarat, Madhya Pradesh, Rajasthan, and Karnataka). India is ranked as one of the leading producers of valuable minerals such as chromite, iron ore, coal and bauxite. The total geographical area of India is 328 million hectares out of which mining lease (other than fuel, atomic and minor minerals) constitutes around 0.14%, barely 20% of it is mined. The Indian subsoils are rich in onshore and offshore crude oil and gas, coal, iron ore, copper, bauxite, etc. India produces as many as 95 minerals, which includes 4 fuel, 10 metallic, 23 non-metallic, 3 atomic and 55 minor minerals (including building and other materials).
- EXAM QUESTIONS: (1) Explain the reforms policies of government in the mining sector. (2) What are the rules that inhibited the steady growth of private firms in mining sector, over the years? Explain.
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