Mint Explainer: How will changes to the law affect India's mining sector?
The government has decided to increase private participation in mining with the goal of attracting technology and capital to the sector. It made amendments to the Mines and Minerals (Development and Regulation) Act, 1957 during the recently concluded monsoon session of Parliament to allow the private sector to participate in the exploration and mining of critical resources such as lithium. Mint looks at how the changes could affect the sector.
The government has amended the MMDR Act to allow private-sector participation in the exploration and mining of critical minerals such as cobalt, copper, graphite, lithium, molybdenum, nickel, phosphorus, potash, silicon, tellurium, titanium and tungsten. Most of these minerals could earlier be mined only by government companies, and limited exploration restricted their production. Now, the private sector will be able to secure a composite licence (for exploration and mining) for some of these minerals.
Standalone mining companies will also get exploration licences to establish mineral blocks and generate revenue through the life of the mine (about 50 years). In July, the government released a list of 30 critical minerals for India. Some of these are rare while others have wide industrial and defence use.
Until recently, India was dependent on imports for many of these critical minerals, which command a big premium globally. The government has proposed auctioning about 90 mining blocks containing minerals such as lithium, cobalt, copper, nickel, titanium, phosphorus, gold and silver by the end of the year. Rules for auctioning these mining blocks are being finalised.
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