NPEAs to directly get exploration projects of critical minerals

Jammu, Dec 15: The Ministry of Mines Friday launched a new scheme to directly sanction exploration projects to Notified Private Exploration Agencies (NPEAs) for critical and deep-seated minerals to give impetus to their (critical minerals’) exploration.

Further, the Ministry also allowed these NPEAs to bid for auction for mineral blocks explored by them, which was not allowed earlier.

For J&K, this decision holds great significance as earlier this year, the Geological Survey of India (GSI), after its ‘preliminary exploration’, had confirmed an inferred resource (G3) of 5.9 million tonnes of Lithium ore in Salal-Haimna areas of Reasi district in Jammu region.

Prior to the launch of this scheme, thorough an Office Memorandum (OM) F. No 6/3/2015-NMET/380, Director National Mineral Exploration Trust (NMET), Ministry of Mines on December 12, 2023 had shared the details of this approved modified scheme (approved for engagement of NPEAs in exploration of critical and strategic minerals by central government) with the Commissioner Secretary (Industries and Commerce), Government of J&K, besides his counterparts in other states and Union Territories, (including Secretary, Department of Industries, Administration of Union Territory of Ladakh).

A copy of this OM was also addressed to the Director, Department of Geology and Mining, Government of Jammu and Kashmir.

Lithium was among critical and strategic minerals, twenty blocks of which as part of the first-ever tranche auction was launched by the Ministry of Mines on November 29, 2023.

The Mines and Minerals (Development and Regulation) Act, 1957, MMDR Act was amended through the MMDR Amendment Act, 2021, with effect from March 28, 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 the 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 the Ministry of Mines has notified 16 Private Exploration Agencies (PEAs) to take up exploration projects through state governments, funded by NMET. Since then, only 17 projects to five NPEAs for Rs 15.88 Cr 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 August 17, 2023, 24 minerals such as Graphite, Nickel, PGE, REE, Potash. Lithium etc. were notified as “Critical and Strategic minerals” by the Ministry of Mines. The amendment confers the power to grant mineral concession of these minerals to the central government so that it (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 concessions for these critical minerals would increase the pace of auction and early production of the minerals,” officials point out.

“The lack of availability of these minerals or concentration of their extraction or processing in a few countries may lead to supply chain vulnerabilities. The future global economy will be underpinned by technologies that depend on minerals such as Lithium, Graphite, Cobalt, Titanium and Rare Earth Elements (REE),” the officials maintain.

“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,” read an official statement.

It added that the decision to allow NPEAs to directly submit projects to the Ministry of Mines would 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 would 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 the exploration arena including international ones and help in bringing new technologies in the field of exploration,” the official statement said.

“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,” the statement added.

Prior to this, the Ministry had also announced to launch “the first ever critical minerals auction process” on November 29.

Notably after Lithium) was categorised as a strategic mineral, along with 23 other minerals, through an amendment by the Centre, the J&K government had provided all the required data related to deposits in Reasi to the Government of India to pave the way for the auction.

J&K Mining Secretary Dr Rashmi Singh, while responding to Greater Kashmir queries with regard to the formalities, preceding the auction, completed by the J&K government, had informed that that they (required formalities) pertained to the area mapping in terms of habitation; demarcation of the entire area etc. and that process was completed by the district administration with the support of team of the J&K Geology and Mining Department.

“That data was to be provided to the Government of India. Prior to it, the Geological Survey of India (GSI) had already done an extensive study. The required data was provided to the Government of India in October,” J&K Mining Secretary had said.

In response to a query pertaining to the post auction process, Dr Singh had said, “Ultimately, all revenue comes to the state or UT concerned; here (in case of Lithium), it will come to J&K.”

The data furnished by the Reasi district administration mentions that Lithium deposits are spread in an area of 18913 Kanals and 17 marlas, out of which 3929 kanals include private land; 269 kanals and 7 marlas State land and 14715 Kanals and 10 marlas forest land. With regard to habitation, there are 326 families and 431 structures, including 418 residential structures.

On November 28, while announcing the launch of the first ever critical minerals auction process, the officials had mentioned that royalty rates of critical minerals were rationalized to encourage more participation in auctions.

“The government had specified royalty rates for Platinum Group of Metals (PGM) at 4 percent, Molybdenum at 7.5 percent, Glauconite and Potash at 2.5percent in March, 2022.  On October 12, 2023 the government specified royalty rates for Lithium at 3 percent, Niobium at 3 percent and Rare Earth Elements at 1 percent,” the officials had said.

In August this year, the Parliament had passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2023 providing for the omission of six minerals, including Lithium from the list of 12 atomic minerals.

Reforms brought in through amendments pertained to omission of 6 minerals from the list of 12 atomic minerals specified in Part-B of the First Schedule of the Act, namely, Lithium bearing minerals; Titanium bearing minerals and ores, Beryl and other beryllium bearing minerals; Niobium and Tantalum bearing minerals and Zirconium-bearing minerals.