Leg-up for lithium hunt as LS passes mining Bill

The reform initiative in the Bill brings lithium out from the list of restrictive atomic minerals where permission to mine could only be granted by the Centre to government companies. The change would allow auction of this critical mineral, used extensively for making batteries for electric vehicles, by the private sector.

The Bill empowers the central government to exclusively auction mining lease and composite exploration licence for certain critical high value minerals such as gold, silver, platinum and copper.

Union minister for coal and mines Pralhad Joshi had introduced the Bill in the Lok Sabha on Wednesday amid continuous slogan-shouting by opposition members over the upheaval in Manipur. The amendment Bill will also dispense with the cumbersome forestry clearance process for mine reconnaissance and prospecting operations, making it easier for the private sector to participate in exploration of the country’s mineral resources.

The new set of changes in mining legislation is being brought to make mineral exploration and production more attractive for investors. The reform proposals in the amendment legislation also include allowing states to grant composite mineral licence without having to get central nod. This is expected to enable state governments to put the blocks for auction for composite at faster pace. It will also raise and fix mineral-wise maximum area limits for mineral concessions to provide larger and economically viable mines to investors.

For prime minerals such as iron ore, the maximum area for prospecting licence and mining lease has been doubled to 50 sq. km and 20 sq. km respectively. This would allow private entries to get same land area for mining as was earlier being given to government companies and that also by the state governments itself without any need for central approval.

According to persons aware of the development, the proposal on a single exploration licence has been inserted in the amendment Bill to promote specialized mineral exploration companies to do reconnaissance and prospecting of mineral resources and earn revenue from its discovery after the mine is put up for auction.

At present, the MMDR Act provides for grant of two types of minerals concessions to private entities through auction, including mining lease for undertaking mining operations and composite licence for undertaking prospecting operations followed by mining operations. There is no provision for grant of a mineral concession for undertaking full range of exploration starting from reconnaissance to prospecting operations.

The reform initiative also brings lithium out from the list of restrictive atomic mineral where permission to mine could only be granted by the Centre to government companies.

Among the other changes, the Centre has also decided to exclude duties and levies (ex-mine price) such as GST, export duty, royalty, District Mineral Foundation (DMF), National Mineral Exploration Trust (NMET) while calculating average sale price (ASP) of minerals. This will restrict charge of royalty over royalty and limit tax burden on companies and improve realisations for the government in mineral concession auctions.

The changes on sale of minerals from captive mines has also been provided to do away with the existing provision where sale of 50% of minerals can commence only after the need of end use plant is meant. This provision was impacting development of mining operations as companies where end use plants were shut or still under development could not mine minerals and extraction of minerals got delayed.

The amendment has now proposed to bring 8 of 12 atomic minerals, including lithium bearing minerals, zirconium bearing minerals, beach sand minerals, titanium bearing minerals, minerals of rare earth group containing uranium and thorium, into a new category called critical and strategic minerals. The Centre would be empowered to give concessions for these minerals to both public and private sector mining companies.

Updated: 29 Jul 2023, 12:25 AM IST