Mining of new minerals opened up to reduce import dependence

The Cabinet on Wednesday opened up mining of a new group of minerals as part of its strategy to boost domestic mining and to reduce import dependence.

The move comes at a time when India hopes to attain self-sufficiency as the Russian invasion of Ukraine affects mineral imports, and is expected to increase fertiliser and food subsidies allocated in the Budget.

The Cabinet approved an amendment to the second schedule of the Mines and Minerals (Development and Regulation) Act, 1957, specifying the rate of royalty of certain minerals that include glauconite, potash, emerald, the platinum group of metals (PGM), andalusite, sillimanite and molybdenum.

The rate of royalty for andalusite, sillimanite and kyanite, which are mineral polymorphs (ability of a specific chemical composition to crystallise in more than one form), have been kept at the same level.

The amendment will lead to the auction of these mineral blocks for the first time in India, and is expected to generate opportunities for the mining and manufacturing sector. It is also expected to reduce imports of potash fertilisers and other minerals, and ensure availability of minerals for downstream industries and support agriculture.

Glauconite and potash are used as fertilisers in agriculture. The platinum group of metals and andalusite and molybdenum are high-value minerals, which find use across different industries.

“The approval will lead to import substitution of many important minerals, thereby, saving valuable forex reserves. It will reduce the country’s foreign dependence through the local production of minerals,” a government statement said.

The statement added that the country is totally dependent on imports to meet its requirement of these minerals. Many state governments have identified such mineral blocks for auction, but since the rate of royalty for these minerals was not separately provided, it was not appropriate to provide impetus to mining these minerals.

The Mines and Minerals (Development and Regulation) Act, 1957, was amended in 2015 to bring in a new regime of granting mineral concessions. The auction regime has matured since then. To give further impetus to the mineral sector, the Act was further amended in 2021. Under the reforms, the Government has given major boost to auction of mineral blocks.

In the last four-five years, central agencies such as the Geological Survey of India and the Mineral Exploration Corporation have carried out exploration on several blocks of minerals which have not been mined in the country so far.

More than 145 mineral blocks have been successfully auctioned in the country. With further impetus given by the reforms made in 2021, more than 146 blocks have been put up for auction in the financial year 2021-22. Of this, 34 blocks have been successfully auctioned in the financial year.

Specification of Royalty and ASP for minerals such as glauconite/ potash, emerald, the Platinum Group of Metals (PGM), andalusite and molybdenum would increase the number of blocks for auction.

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