THE MINES AND MINERALS (DEVELOPMENT AND REGULATION) AMENDMENT BILL
1. Context
Recently, India's Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill, aimed at attracting private sector investment in exploring critical and deep-seated minerals within the country.
The Bill designates six minerals, including lithium, essential for electric vehicle batteries and energy storage solutions, as " critical and strategic" resources.
Previously, the exploration and mining of these minerals were limited to government-owned entities.
2. India's Import Dependency for Critical Minerals
- India relies heavily on imports for its critical minerals, which are crucial for various industries, including manufacturing, infrastructure and clean energy transitions.
- As the country works towards achieving its net-zero emission goals, securing a stable supply of minerals like lithium, cobalt, graphite and rare earth elements (REEs) becomes vital.
- The dependence on imports poses significant challenges, including supply chain vulnerabilities and disruptions.
- For instance, China dominates cobalt mines in the Democratic Republic of Congo, a major cobalt-producing region, leading to concerns about supply reliability.
- To reduce such reliance, major economies like the U.S., the U.K., and the European Union have pursued strategies to enhance supply-chain resilience for critical minerals.
3. The Role of Private Sector Exploration
- The Mines and Minerals Amendment Bill recognizes the importance of private sector involvement in exploring and mining critical minerals.
- Currently, India has only explored a small fraction of its geological potential, limiting the discovery of economically viable mineral reserves.
- Private exploration companies, known as junior explorers, play a crucial role in risk-taking and expediting the exploration process.
4. The Bill aims to encourage private participation by
- Removing atomic minerals, including lithium, from the list of minerals exclusively reserved for government entities.
- Permitting prohibited exploration activities like pitting, trenching, drilling and sub-surface excavation during reconnaissance.
- Introducing a new Exploration License (EL) to facilitate private sector exploration of specified critical and deep-seated minerals.
- Allowing private explorers to bid for desired percentage shares of the auction premium paid eventually by mining lease holders, thus incentivizing exploration.
5. Possible Issues with the Proposed Amendments
Revenue Generation Timing
Private explorers might have to wait for years or face uncertain outcomes until a mine is successfully auctioned and operationalized to receive its share of the premium.
Auction Method Suitability
The auction method for exploration licenses might not be suitable since the value of the exploration is uncertain until resources are discovered.
Limited Exploration Incentives
The Bill's provisions limit explorers' ability to sell their discoveries to miners, potentially discouraging big investments in exploration.
6. The Way Forward
- India's move to involve the private sector in critical mineral exploration is a significant step towards enhancing the country's mineral resource base and reducing import dependency.
- However, there are concerns about the revenue generation process and exploration incentives that need to be addressed.
- With strategic planning and stakeholder collaboration, India can unlock its vast geological potential and secure a stable supply of critical minerals for its economic development and clean energy goals.
| For Prelims: the Mines and Minerals (Development and Regulation) Amendment Bill, lithium, net-zero emission goals, cobalt, graphite, rare earth elements, atomic minerals,
For Mains:
1. Discuss the challenges posed by India's import dependency on critical minerals and its implications for the country's manufacturing, infrastructure and clean energy goals. How can India address these challenges? (250 Words)
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Previous Year Questions
1. Which type of battery is used in the recently launched world's first fully electric cargo ship by change? (Delhi Police Constable 2017)
A. Lead Acid B. Manganese C. Lithium ion D. Nickel metal hydride
Answer: C
2. With reference to ‘NET - ZERO’ goal for 2050, which of the following statements is/are correct? (UPPSC Combined State Exam 2021)
1. It means that a country will bring down its emissions to zero by 2050.
2. It means that a country’s emissions to be compensated by absorption and removal of greenhouse gases from the atmosphere.
Select the correct answer using the codes given below.
A. Only 1 B. Only 2 C. Both 1 and 2 D. Neither 1 nor 2
Answer: B
3. Consider the following statements: (UPSC 2022)
1. "The Climate Group" is an international non-profit organization that drives climate action by building large networks and runs them.
2. The International Energy Agency in partnership with the Climate Group launched a global initiative "EP100".
3. EP100 brings together leading companies committed to driving innovation in energy efficiency and increasing competitiveness while delivering on emission reduction goals.
4. Some Indian companies are members of EP100.
5. The International Energy Agency is the Secretariat to the "Under2 Coalition".
Which of the statements given above are correct?
A. 1, 2, 4 and 5 B. 1, 3 and 4 only C. 2, 3 and 5 only D. 1, 2, 3, 4 and 5
Answer: B
4. About three-fourths of world's cobalt, a metal required for the manufacture of batteries for electric motor vehicles, is produced by (UPSC 2023)
A. Argentina B. Botswana C. the Democratic Republic of the Congo D. Kazakhstan
Answer: C
5. Graphene is frequently in news recently. What is its importance? (UPSC 2012)
1. It is a two-dimensional material and has good electrical conductivity.
2. It is one of the thinnest but strongest materials tested so far.
3. It is entirely made of silicon and has high optical transparency.
4. It can be used as 'conducting electrodes' required for touch screens, LCDs and organic LEDs. Which of the statements given above are correct?
A. 1 and 2 only B. 3 and 4 only C. 1, 2 and 4 only D. 1, 2, 3 and 4
Answer: C
6. Graphite is a much better conductor of heat and electricity than diamond. This is due to the fact that each carbon atom in graphite: (NDA 2015)
A. undergoes sp2 hybridization and forms three sigma bonds with three neighbouring carbon atoms
B. undergoes sp3 hybridization
C. is tetrahedrally bonded
D. is free from van der Waals force
Answer: A
7. Recently, there has been a concern over the short supply of a group of elements called 'rare earth metals.' Why? (UPSC 2012)
1. China, which is the largest producer of these elements, has imposed some restrictions on their export.
2. Other than China, Australia, Canada and Chile, these elements are not found in any country. 3. Rare earth metals are essential for the manufacture of various kinds of electronic items and there is a growing demand for these elements.
Which of the statements given above is/are correct?
A. 1 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
Answer: C
8. With reference to India, consider the following statements: (UPSC 2022)
1. Monazite is a source of rare earths.
2. Monazite contains thorium.
3. Monazite occurs naturally in the entire Indian coastal sands in India.
4. In India, Government bodies only can process or export monazite.
Which of the statements given above are correct?
A. 1, 2 and 3 only B. 1, 2 and 4 only C. 3 and 4 only D. 1, 2, 3 and 4
Answer: B
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Source: The Hindu
