Recently, the Minerals (Evidence of Mineral Contents) Second Amendment Rules, 2021 and the Mineral (Auction) Fourth Amendment Rules, 2021 have been notified. These are set to amend the Minerals (Evidence of Mineral Contents) Rules, 2015 [MEMC Rules] and the Mineral (Auction) Rules, 2015 [Auction Rules], respectively. These new changes follow Lok Sabha and Rajya Sabha’s approval of the Mines and Minerals (Development and Regulation) (MMDR) Amendment Bill, 2021.
Minerals (Evidence of Mineral Contents) Rules, 2015
The MEMC Rules were amended in June 2021 to include provisions for auction to grant a composite licence in specific areas. These changes target locations where at least a Reconnaissance Survey (G4) level has been completed or where mineral potentiality has been identified based on available geoscience data. The goal of these amendments is to identify more mineral blocks for auction, thus increasing exploration and production, improving mineral availability, and creating jobs in the sector.
Mineral (Auction) Rules, 2015
The Auction Rules also saw amendments to define bid security, performance assurance, and other eligibility conditions to enable block auctions for composite licences. To support prospective bidders and other stakeholders, the Geological Survey of India (GSI) has offered access to the Online Core Business Integrated System Project (OCBIS) portal’s baseline geoscience data.
Details of the Amendments
The Second Amendment Rules for 2021 allow any person intending to participate in the auction to propose suitable blocks for composite licence where mineral potentiality has been identified using available geoscience data. Assessment of the mineral potentiality of the proposed blocks is done by a committee appointed by the State Government, which then recommends the block for auction.
The Fourth Amendment Rules of 2021 ensure that a person proposing blocks for auction only has to deposit half of the bid security amount if their proposed blocks are selected for auction. There have been changes to allow part surrender of mining lease areas in all cases and provisions for disposal of overburden or waste rock generated during mining or beneficiation of the mineral. The minimum area for granting a mining lease has been revised from 5 to 4 hectares.
Objectives and Significance
These amendments aim to identify more mineral blocks for auction, increasing exploration and production rates, and improving the country’s mineral availability. They also encourage more participation in auctions, promoting competition, and helping state governments in identifying more blocks for composite licence auctions.
Mining Initiatives and the National Mineral Policy 2019
Efforts are being made to operationalise auctioned greenfield mineral blocks quickly. The Government is also contemplating tax rationalisation in the mining sector. Under the Atmanirbhar Bharat scheme, enhancing private investments in the mineral sector and bringing in other reforms has been announced.
Minerals in India
India is abundantly endowed with mineral resources, with over 20,000 known mineral deposits and recoverable reserves of more than 60 minerals. Only 11 states account for 90% of the total number of operational mines. Out of a total geographical area of 328 million hectares, mining leases (excluding fuel, atomic, and minor minerals) constitute around 0.14%, with only about 20% of that currently mined. India is globally recognised as a significant producer of valuable minerals such as chromite, iron ore, coal, and bauxite. It produces around 95 different minerals, which includes 4 fuel, 10 metallic, 23 non-metallic, 3 atomic, and 55 minor minerals.