Daily Current Affairs : 3-August-2023
India’s mining sector has undergone significant reforms over the years to promote transparency, welfare of affected communities, and exploration of mineral resources. The latest step in this direction is the passage of the Mines and Minerals (Development and Regulation) Amendment Bill, 2023, by the Rajya Sabha. The bill aims to make further amendments to the existing Mines and Minerals (Development and Regulation) Act, 1957, to enhance the efficiency and productivity of the mineral sector.
Historical Reforms in the Mineral Sector
The Mines and Minerals (Development and Regulation) Act, 1957, underwent comprehensive amendments in 2015 to introduce vital reforms in the mining industry. Some of these reforms included:
- Mandating Method of Auction: The amendment mandated the auctioning of mineral concessions to ensure transparency in the allocation of mineral resources.
- District Mineral Foundation (DMF): The Act established the DMF to work for the welfare of people and areas affected by mining activities.
- National Mineral Exploration Trust (NMET): The NMET was set up to boost mineral exploration and impose stringent penalties for illegal mining.
The Act underwent further amendments in 2016 and 2020, removing the distinction between captive and merchant mines, easing the transfer of mineral concessions, and lapsing rights of non-auctioned concession holders to encourage private sector participation through auctions.
Recent Amendments in the MMDR Act
The Mines and Minerals (Development and Regulation) Amendment Bill, 2023, introduces significant changes to the mineral sector:
1. Omission of 6 Minerals from Atomic Minerals List
The bill omits six minerals from the list of 12 atomic minerals, namely:
- Lithium-bearing minerals
- Titanium-bearing minerals and ores
- Beryl and other beryllium-bearing minerals
- Niobium and Tantalum-bearing minerals
- Zirconium-bearing minerals
This amendment opens the exploration and mining of these minerals to the private sector, fostering investment and technological advancements in the mining industry.
2. Exclusive Auction of Certain Critical Minerals
The bill empowers the Central Government to exclusively auction mining leases and composite licenses for certain critical minerals. These minerals include:
- Minerals essential for strategic and industrial purposes
While the auction process will be conducted by the Central Government, the grant of mining leases or composite licenses to successful bidders will be carried out by the State Government. The revenue generated from the auction premium and other statutory payments will continue to be received by the State Government.
3. Introduction of Exploration License (EL) for Deep-Seated and Critical Minerals
To attract foreign direct investment (FDI) in the mining and exploration sector, the bill introduces a new mineral concession called Exploration License (EL). This license will allow the licensee to undertake reconnaissance and prospecting operations for critical and deep-seated minerals mentioned in the newly proposed Seventh Schedule to the Act.
Implications of the Amendments
The Mines and Minerals (Development and Regulation) Amendment Bill, 2023, is expected to have several positive impacts on the Indian mining sector:
- Boosting Private Sector Participation: By removing certain minerals from the atomic minerals list and introducing the exploration license, the bill encourages private sector investment in mineral exploration and mining activities.
- Enhanced Transparency and Efficiency: The exclusive auction of critical minerals by the Central Government will promote transparency and ensure optimal allocation of resources.
- Attracting Foreign Investment: The introduction of the Exploration License and the relaxation of FDI norms are likely to attract foreign investment, leading to advanced mining technologies and practices.
- Sustainable Development: The bill’s provisions for the welfare of affected communities through the District Mineral Foundation will foster sustainable development in mining regions.
Important Points:
- The Mines and Minerals (Development and Regulation) Act, 1957, has undergone several amendments since 2015 to bring reforms in the mineral sector.
- The latest amendment bill, passed in 2023, aims to further enhance the efficiency and productivity of the mining industry.
- The 2023 amendment bill omits six minerals from the list of 12 atomic minerals, including Lithium, Titanium, Beryllium, Niobium, Tantalum, and Zirconium-bearing minerals, opening exploration and mining to the private sector.
- The Central Government is empowered to exclusively auction mining leases and composite licenses for certain critical minerals essential for strategic and industrial purposes.
- Successful bidders in the auction will be granted mining leases or licenses by the State Government, with auction premiums and payments received by the State Government.
- The bill introduces a new mineral concession called the Exploration License (EL), allowing licensees to undertake reconnaissance and prospecting for deep-seated and critical minerals.
- Despite allowing 100% FDI in mining and exploration, the mining sector has not seen significant foreign investment; the EL provision seeks to attract foreign investment in the sector.
- The amendments are expected to boost private sector participation, encourage transparency, and ensure optimal allocation of mineral resources.
- The District Mineral Foundation (DMF) established in previous amendments will continue to work for the welfare of communities affected by mining activities.
- Sustainable development in mining regions is expected to improve with the help of DMF initiatives.
- The bill’s effective implementation will be crucial in realizing the objectives of the amendments and unlocking India’s mineral resources’ full potential.
Why In News
With unanimous approval from the Rajya Sabha, the Mines and Minerals (Development and Regulation) Amendment Bill, 2023 is set to usher in a new era of efficient governance and sustainable development in the mining sector. The amendments seek to address modern challenges while upholding environmental conservation and promoting responsible mining practices in line with global standards.
MCQs about Transforming India’s Mining Sector
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What is the main objective of the Mines and Minerals (Development and Regulation) Amendment Bill, 2023?
A. To remove restrictions on the transfer of mineral concessions
B. To establish the District Mineral Foundation (DMF)
C. To mandate the method of auction for grant of mineral concessions
D. To introduce Exploration License (EL) for deep-seated minerals
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Which minerals have been omitted from the list of atomic minerals by the 2023 amendment bill?
A. Gold and Silver
B. Lithium and Titanium
C. Iron and Copper
D. Uranium and Thorium
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Under the 2023 amendment bill, who will exclusively conduct the auction for certain critical minerals?
A. State Government
B. Central Government
C. Private Companies
D. District Mineral Foundation (DMF)
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What is the purpose of introducing the Exploration License (EL) in the mining sector?
A. To allow exploration of minerals for free
B. To encourage foreign direct investment (FDI) in the mining sector
C. To establish National Mineral Exploration Trust (NMET)
D. To remove the distinction between captive and merchant mines
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