Government Pilots Bill to Allow Private Sector to Mine Critical Minerals

These minerals, including lithium, are vital to India's net-zero emission commitment


The government introduced a Bill in the Lok Sabha to amend the Mines and Minerals (Development and Regulation) Act to allow the private sector to explore and mine critical minerals used in the energy sector.

The proposed legislation seeks to introduce an exploration license for critical and deep-seated minerals. It plans to remove six atomic minerals, such as lithium, titanium, and zirconium-bearing minerals, from the list of reserved minerals. These minerals play vital roles in space industries, electronics, communications, energy sectors, and electric batteries, making them crucial for India’s net-zero emission commitment.

By opening exploration and mining of these minerals to the private sector, the Bill aims to stimulate heightened production and utilization in various industries.

The amendments come when the government is set to auction the 5.9 million tons of lithium reserves found in Jammu and Kashmir’s Reasi district last December.

The license will be granted through auction, allowing the licensee to undertake survey and prospecting operations. The explored blocks will then be auctioned for mining leases, providing better revenue to state governments and encouraging private sector participation in mineral exploration.

To ensure transparency and efficiency, the government will conduct auctions through competitive bidding, including e-auction, for granting mining leases or composite licenses.

Holders of exploration licenses will be entitled to a share of the applicable amount quoted in the auction of mining leases payable by lessees to the state government, applicable only to minerals specified in the seventh schedule.

The Bill imposes area restrictions for exploration licenses, limiting the total area covered under a single license to one thousand square kilometers and restricting the total area covered under one or more exploration licenses to five thousand square kilometers.

Exploration license holders must submit geological reports to the state government within three months of completing reconnaissance and prospecting operations.

The Bill clarifies the rights and liabilities of holders of mineral concessions, guiding the extension of licenses and retention of exploration areas. It seeks to streamline the mining sector, attract investments, and promote sustainable mineral exploration.

The Geological Survey of India announced the discovery of lithium reserves in Rajasthan earlier this year.