Mining Act tweak planned to push rare, critical mineral exploration

The government is planning to amend the Mines and Minerals (Development and Regulation) Act, 1957 to encourage exploration of deep-seated minerals such as gold, silver, copper and zinc.

"The cabinet is likely to take up the amendment bill soon," said a senior government official, who did not wish to be identified.

The amendment proposes to insert the provision of an exploration licence in the law which will be granted through auction for undertaking reconnaissance and prospecting operations, according to the official. The licence will also be granted only for deep-seated and critical minerals that will be specified in a new schedule to the Act, said the official.


Such minerals include copper, tellurium, selenium, lead, zinc, cadmium, indium, gold, silver, diamond, rock phosphate, apatite, potash, and elements of the rare earth group. Critical and strategic minerals such as lithium, cobalt, molybdenum, rhenium, tungsten, graphite, vanadium, nickel, tin, platinum group of elements, columbite, tantalite, lepidolite, scheelite and cassiterite are also part of the list.

The proposed amendment will pave the way for granting mineral concessions for undertaking the full range of exploration starting from reconnaissance to prospecting operations, said officials. Companies will be allowed to suggest areas they want to explore, and eventually mine in India, as per the changes proposed, they said.

This is a deviation from the usual practice where blocks or mines are defined by the government to be taken up for auction.

The area, once suggested for exploration, will require an approval from the state government and can be subsequently awarded for mining operations.

The proposed changes are likely to incentivise private sector participation in all spheres of mineral exploration, with a focus on precious and critical ones. They will allow junior mining companies to get exploration rights on the basis of available baseline survey data. These companies explore the area from the reconnaissance stage and bring it up to the level required for starting mining operations.

Companies will also be allowed to transfer the mineral concession in full or part during the exploration period or at the conclusion of exploration, as per the changes.

This will be the fifth amendment to the Mines and Minerals (Development and Regulation) Act since 2014, with earlier changes mandating e-auction for mineral resources and allowing extension of mining leases which were expiring.

India presently has about 688,000 square kilometres of obvious geological potential areas, of which 197,000 sq km of high potential area has been identified by the Geological Survey of India. It is estimated that only 1% of the global budget for mineral exploration is spent in India.