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Centre takes over critical mineral exploration as states underperform
29 specific minerals are covered under the bill

Centre takes over critical mineral exploration as states underperform

Nov 13, 2024
02:12 pm

What's the story

The Indian central government has taken over the responsibility of auctioning exploration licenses (ELs) for critical and deep-seated minerals. This move comes after states faced difficulties in attracting junior mining companies for mineral exploration. ELs will be auctioned for the first time to encourage specialized agencies to discover mineral resources within the country. The Mines and Minerals (Development and Regulation) Amendment Bill, 2023, empowers the central government to notify and auction these licenses for 29 specific minerals.

Auction delays

State governments' slow progress in auctioning exploration licenses

Out of 14 state governments to whom the blocks were given for exploration licenses, only six have initiated the auction process for 12 blocks. Now, the Ministry of Mines has issued an order stating the central government will be responsible for notifying mineral blocks and conducting their auctions. This move will streamline the process and ensure a more efficient allocation of resources.

License allocation

Central government's role in exploration license allocation

Upon successful completion of an auction, the central government will inform the state government about the preferred bidder. The state government will then grant an exploration license to that bidder as per the rule. This procedure is designed to ensure transparency and fairness in the allocation of exploration licenses for mineral resources.

License objectives

Aim of exploration license and private sector participation

The Mines and Mineral (Development and Regulation) Amendment Bill, 2023, was amended last year to include provisions for exploration licenses. These licenses were meant to encourage private sector participation in mineral exploration. The aim was to bring advanced technology, finance, and expertize into this sector. However, due to the fragmented approach of states in auctioning blocks, exploration entities have been hesitant to join India's mineral exploration push.

Auction hurdles

Challenges faced by specialized exploration agencies

The exploration license blocks are huge and need specialized exploration agencies to operate them. When these blocks are auctioned separately by different states, these agencies have to deal with multiple state governments to participate in auctions. This fragmented approach has led to no response from dedicated exploration agencies, further complicating the process of mineral resource discovery in India.