Parliament passes Minerals (Development & Regulation) Amendment Bill, 2023 | Lithium among 6 minerals omitted from list of 12 atomic minerals

Jammu, Aug 2: Rajya Sabha Wednesday passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2023 providing for omission of six minerals, including Lithium from the list of 12 atomic minerals.

With the worldwide focus on critical minerals, the amendments introduce 3-pronged major reforms in the mining sector.

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.

Secondly, they would empower the central government to exclusively auction mineral concessions for critical minerals specified in Part D of the First Schedule of the Act and revenue from these auctions will accrue to the concerned state government.

Significance of amendment Bill for J&K lies in the fact that the Geological Survey of India (GSI), after its ‘preliminary exploration’, had recently confirmed an inferred resource (G3) of 5.9 million tonnes of lithium ore in Salal-Haimna areas of Reasi district in Jammu region.

The Amendment Bill provides to remove certain minerals from the list of atomic minerals, viz. minerals of lithium, beryllium, titanium, niobium, tantalum and zirconium which are technology and energy critical having use in space industry, electronics, technology and communications, energy sector, electric batteries and are critical in net-zero emission commitment of India.

“Demand for minerals like lithium used in lithium-ion batteries is likely to increase manifold as the focus shifts towards clean energy. Currently, the country is dependent on imports for most of these important minerals as there is not much exploration or mining of these minerals due to existing legal provisions. These minerals have high economic importance and considerable supply risk due to geo-political uncertainties. Upon removal of these minerals from the list of atomic minerals, exploration and mining of these minerals will be open to the private sector. As a result, exploration and mining of these minerals is expected to increase significantly in the country,” it was stated.

Another major amendment passed by the Parliament is to empower the central government to exclusively auction mining lease and composite licence for certain critical minerals viz. molybdenum, rhenium, tungsten, cadmium, indium, gallium, graphite, vanadium, tellurium, selenium, nickel, cobalt, tin, platinum group of elements, minerals of “rare earth” group (not containing Uranium and Thorium); fertilizer minerals such as potash, glauconite and phosphate (without uranium) and minerals (including Lithium) being removed from the list of atomic minerals.

Even though auction would be conducted by the central government, the mining lease or composite licence for these minerals to the successful bidders would be granted by the state government only and the auction premium and other statutory payments would continue to be received by the state government, it was specified.

The Bill also provided for grant of a new mineral concession, namely, Exploration Licence (EL), in the Act. The exploration licence granted through auction shall permit the licensee to undertake reconnaissance and prospecting operations for critical and deep-seated minerals mentioned in the newly proposed Seventh Schedule to the Act.  These minerals are copper, gold, silver, diamond, lithium, cobalt, molybdenum, lead, zinc, cadmium, elements of the rare earth group, graphite, vanadium, nickel, tin, tellurium, selenium, indium, rock phosphate, apatite, potash, rhenium, tungsten, platinum group of elements and other minerals proposed to be removed from the list of atomic minerals.

Preferred bidder for exploration licence will be selected through reverse bidding for share in auction premium payable by the mining lease (ML) holder. Bidder quoting lowest percentage bid will be preferred bidder for exploration licence. This amendment is expected to provide a conducive legal environment for attracting FDI and junior mining companies in the country.

“The blocks explored by the Exploration Licence holder can be directly auctioned for mining lease, which will fetch better revenue to the state governments. The exploration agency will also benefit by getting a share in the auction premium payable by the lease holder,” it has been stated.

Notably, in the current session on July 31, the union government had stated that the decision regarding “auctioning of the Lithium mineral block in Salal-Haimna areas of Reasi district in Jammu region would be taken up by the government of Jammu and Kashmir as on date.”

This was stated by the Union Minister of Coal, Mines and Parliamentary Affairs Pralhad Joshi in a written reply in Rajya Sabha.

Prior to it, the J&K government officials had maintained that e-auction of potentially rich reserves of Lithium in Reasi – the second highest in the world, would follow the appointment of transaction advisor, the process for which was in final stages.

On May 2, the Secretary Ministry of Mines Vivek Bharadwaj at an industry event in the union capital had stated that the auction of Lithium reserves would be started by December as his ministry had written to the J&K administration for the transaction advisor for it (auction).

In Rajya Sabha on July 31, Joshi had said that the Geological Survey of India (GSI) carried out a ‘preliminary exploration’ i.e., G3 stage mineral exploration project on Bauxite, rare earth elements and Lithium in Salal-Haimna areas of Reasi district in Jammu & Kashmir during FS 2020-21 and 2021-22 and had confirmed an inferred resource (G3) of 5.9 million tonnes of lithium ore.

“There are scattered houses in the mineralised block of Salal-Haimna in Reasi district,” he said.

With regard to its processing and extraction, Joshi had informed, “The processing and refining methods for lithium ore can vary depending on the type of lithium deposit, the characteristics of the ore, and the intended end-use of the lithium compounds. India is capable of developing technologies for beneficiation of lithium ore to lithium mineral concentrate. Successful experimentation has been done for extraction of lithium from mineral concentrate in laboratory scale.”