Mines Ministry to Directly Sanction Exploration Projects of Critical Minerals to Notified Private Exploration Agencies

In order to give impetus to exploration of critical and deep-seated minerals Ministry of Mines has launched a new scheme to directly sanction exploration projects to NPEAs for critical and deep-seated minerals. Further, the Ministry has also allowed these NPEAs to bid for auction for mineral blocks explored by them which was not allowed earlier.

The Mines and Minerals (Development and Regulation) Act, 1957, MMDR Act was amended through the MMDR Amendment Act, 2021, w.e.f. 28/3/2021 which, inter alia, empowers the Central Government to notify entities, including private entities, that may undertake prospecting operations.

The interested private exploration agencies are required to obtain accreditation in accordance with the scheme of Ministry of Mines and thereafter apply to the Ministry for their notification under the second proviso to sub-section (1) of section 4 of the Act.

Since March, 2022 Ministry of Mines has notified 16 Private Exploration Agencies to take up exploration projects through State Governments, funded by NMET. Since then, only 17 projects to five NPEAs for Rs.15.88 crore have been sanctioned from NMET funds. Out of 17 projects sanctioned so far, 11 are of critical minerals.

Recently, through an amendment in the MMDR Act on 17^th August 2023, 24 minerals such as Graphite, Nickel, PGE, REE, Potash etc. were notified as Critical and Strategic minerals by Ministry of Mines. The amendment confers the power to grant mineral concession of these minerals to Central Government so that the Government can prioritize auction of these minerals looking at the requirements of the country. As these critical minerals are indispensable for the growth of our economy, authorising the Central Government to auction concession for these critical minerals would increase the pace of auction and early production of the minerals.

In tune with the amendments of 2023 and to increase the pace of exploration in the country for these minerals, Ministry of Mines has notified a transformative scheme wherein NPEAs will be directly sanctioning exploration projects for minerals mentioned in Part D of First Schedule and in Seventh Schedule of MMDR Act, 1957 from NMET. Further, these agencies will be allowed to bid in auction of mineral blocks explored by them, which was not allowed earlier.

The decision to allow NPEAs to directly submit projects in Ministry of Mines will help in cutting out delays in sanction of projects as well as help in faster execution of projects. Further, the provision to allow these exploration agencies in bid to auction the explored mineral blocks by them will attract bigger companies in mining in the exploration arena. This provision is also expected to encourage junior mining companies from around the world to come to India and take up exploration projects with NMET funding. Overall, this new scheme is expected to bring many players in exploration arena including international ones and help in bringing new technologies in the field of exploration.

The scheme marks a big leap forward in promoting exploration of critical minerals vital for realizing “Atmanirbhar Bharat” vision of the Prime Minister of India.