Paving the way for entry of private players into mining of lithium and other deep-seated minerals, the Centre has proposed amendments to The Mines and Mineral (Development and Regulation) Act, 1957.

The Mines and Mineral (Development and Regulation) Amendment Bill 2023 was introduced in the Lok Sabha by Parliamentary Affiars Minister Pralhad Joshi on Wednesday.

The Bill proposes to omit at least six previously mentioned atomic minerals from a list of 12 which cannot be commercially mined. The most important mineral to be taken out of this list through the Bill introduced in Parliament is lithium. Lithium, a non-ferrous, alkali metal, is a key component for electric vehicles, batteries and other energy storage solutions.

Also read: Cabinet approves lithium auction process

Being under the atomic minerals list, the mining and exploration was previously reserved for government entities.

The other five minerals are: beryl and other beryllium-bearing minerals; niobium (bearing minerals); titanium (bearing minerals and ore); tantalum; and zirconium bearing minerals and ores.

These minerals have various applications in space industry, electronics, communications, energy sector, electric batteries. According to the Bill, these minerals are also critical in net-zero emission commitment of India.

Also read: Lithium prices rebound on recovery in demand for EV batteries

“Upon removal of these minerals from the said list, exploration and mining will be opened up for the private sector as well,” Joshi mentioned while introducing the Bill.

India’s Lithium Find

India has so far declared 5.9 million tonnes of lithium reserves in the Salal Hamima region, in Resai district, of Jammu and Kashmir.

Further exploration is also on in the region, Mines Ministry officials had said. Auction of these declared reserves is likely around December, and the Ministry is also in the process of working out the reserve price of lithium.

Incidentally, the country has been import-dependent on some of these key critical minerals like lithium, nickel, copper, cobalt, and others. In FY23, India’s lithium import bill was around ₹23,171 crore; and covered electric accumulators, including separators. In FY22, imports for lithium ion was ₹13,673.15 crore.

Other Amendments

The Bill notes the scarcity of critical minerals, their concentration in limited geographical locations, and the potential for supply chain vulnerabilities and disruptions.

Accordingly, another major reform proposed is introduction of exploration licence for deep-seated and critical minerals. The proposed exploration licence would facilitate, encourage and incentivise private sector participation in all spheres of mineral exploration for critical and deep-seated minerals.

“The exploration licence (to be) granted through auction shall permit the licencee to undertake reconnaissance and prospecting operations for critical and deep-seated minerals,” said the Bill. The minerals include gold, silver, copper, zinc, lead, nickel, cobalt, platinum group of minerals, diamonds, and so on.

These minerals are difficult and expensive to explore and mine compared with surfacial or bulk minerals.

“The blocks explored by the exploration licence holder would be auctioned for mining lease within the prescribed timeline, which will fetch better revenue to the State Governments,” the Bill mentioned, adding that the exploration agency shall be entitled to a share in the auction premium payable by the mining lease holder.

The country is mostly dependent on imports for these minerals.