India has proposed opening up offshore mining or deep-sea mining of non-atomic minerals or poly-metallic nodules to private companies. Production leases are to be granted only through competitive bidding.

The Offshore Areas Mineral (Development and Regulation) Amendment Bill, 2023, proposing these changes, was introduced in Parliament by the Minister for Mines, Coal and Parliamentary Affairs, Pralhad Joshi.

The Government will continue to allocate offshore production leases for blocks containing higher-grade atomic minerals — such as uranium and zircon — and non-atomic minerals such as chromium only to state-controlled entities.

India’s coastline touches nine States and four Union Territories and two million square kilometres of exclusive economic zone.

“Previous efforts to allocate offshore blocks did not bear the desired results due to the lack of a legal framework for a fair and transparent mechanism to allocate operating rights in the Act and the stalemate caused due to pending litigation over the allocation of blocks,” the Bill said.

Offshore mining is the process of retrieving mineral deposits from the deep seabed, at a depth of more than 200 metres. In the process, poly-metallic nodules, including precipitated iron oxy-hydroxides and manganese oxides, onto which metals such as nickel, cobalt, copper, titanium and rare earth elements gather, are sorted, and unwanted sediments are flushed back into the sea.

Proposed amendments

Apart from granting a production lease to the private sector “only through auction by competitive bidding”, the Bill proposes to “provide grant of operating rights without competitive bidding” to a Government or a Government company or a corporation in the mineral bearing areas reserved by the Centre.

It has also proposed the introduction of composite licences for both exploration and production.

“In order to remove the impasse in the sector, auction has been introduced as the only method of selection for grant of composite licence or production lease,” the Bill proposes.

The amendment also seeks to remove the provision for renewal of production lease and provide a fixed period of 50 years.

Limits on the area a person can acquire in respect of any mineral or a group of associated minerals, as may be specified by rules, under one or more operating rights all taken together, has been suggested.

Mineral Trust

Amendments include establishing an Offshore Areas Mineral Trust to maintain a non-lapsable fund. The fund will ensure availability of funds for exploration, mitigation of the adverse impact of offshore mining, disaster relief, research, work for interest, and benefit of the persons affected by exploration or production operations.

A timeline of four years (extendable by one year) has been proposed for commencement of production and dispatch, whereas a timeline of two years (extendable by one year) has been proposed for re-commencement of production and dispatch after discontinuation.

The amendments also call for transfer of composite licence or production lease to promote ease of doing business, while penal provisions include an increase in the fine for illegal mining and other offences.