GS Paper III

News Excerpt:

In a move to encourage private exploration of critical and deep-seated minerals in the country, the government for the first time has notified 16 private exploration agencies.

More about the news:

• Private firms, including Tata Steel, Engeotech, and Novomine, etc. can obtain exploration licenses for 29 minerals listed in the ‘Seventh Schedule’ of the Mines and Minerals (Development and Regulation) Act, 1957.
• Minerals include gold, silver, copper, cobalt, nickel, lead, potash, beryllium, and lithium.
• Private agencies will need to engage in competitive bidding processes initiated by the state government to secure an exploration license. 
• These agencies can conduct various operations, including pitting, trenching, drilling, and sub-surface excavation after winning bids.
• Government provides a financial incentive of up to 25% of the approved cost of exploration to encourage private participation.
• India aims to boost exploration activities, especially for deep-seated and critical minerals, to tap unexplored resources.

What are the Critical minerals?

• Critical minerals are mineral resources that are essential to the economy and whose supply may be disrupted.
• The 'criticality' of minerals changes with time as supply and society's needs shift. Table salt, for example, was once a critical mineral.
• Today, many critical minerals are metals that are central to high-tech sectors. They include the rare earth elements and other metals such as lithium, indium, tellurium, gallium, and platinum group elements.

Challenges in mineral exploration:

• Low exploration budget: It is estimated that India has explored just 10 % of its Obvious Geological Potential (OGP), less than 2 % of which is mined, and the country spends less than 1 % of the global mineral exploration budget.
• Low contribution in rare earth exploration: Despite possessing 6% of the world's 120,000 million tonnes of rare earth reserves, India's contribution to global output remains at only 1%.
• Pressure on Bulk Minerals: Public sector undertakings were better suited for exploring common minerals like coal and iron ore but struggled with critical minerals.
• Limited Expertise: Public agencies faced challenges in exploring deep-seated and critical minerals due to the need for specialized skills.
• Financial Constraints: High expenditure and long project durations made it difficult for public agencies to explore risky projects.

Significance of allowing the private sector in exploration:

• Diversified Initiatives: Involving private companies diversifies exploration efforts beyond government agencies.
• Promotes Experiments and Expertise: Private firms can take risks and use their expertise to explore new mines.
• Research and development: Private sector involvement can bring efficiency and innovation to exploration activities.
• Resource Tap: It allows tapping into unexplored mineral resources, especially deep-seated and critical minerals.
• Enhances Indian Contribution: It can increase India's contribution to global mineral output by leveraging private sector capabilities.

Way forward:

• The government's initiative to involve private exploration firms in critical mineral exploration is commendable.
• It can enhance success, streamline bureaucratic processes, foster research collaboration, and incentivize technology adoption.
• Promoting international partnerships and transparent regulations can attract investments.This holistic approach will unlock India's vast mineral potential, contributing to global supply chains.

Prelims PYQ

Q. With reference to the management of minor minerals in India, consider the following statements : (UPSC 2019)

1. Sand is a ‘minor mineral’ according to the prevailing law in the country.
2. State governments have the power to grant mining leases of minor minerals, but the powers regarding the formation of rules related to the grant of minor minerals lie with the Central Government.
3. State Governments have the power to frame rules to prevent illegal mining of minor minerals.

Which of the statements given above is/are correct ?

(a) 1 and 3 only

(b) 2 and 3 only

(c) 3 only

(d) 1, 2 and 3