Centre plans to expand area limits to boost critical minerals mining

Shift aims to address challenges associated with mining critical minerals

In an effort to accelerate the pace of critical mineral mining in the country, the Centre is planning to increase the area granted to individual players by more than four fold.

For mining leases, the area will be expanded from the current limit of 10 square kilometres (sq km) to 50 sq km.

For prospecting licences (granted in the case of composite licence), the limit will be increased from 25 sq km to 100 sq km.

This policy shift aims to address the unique challenges associated with mining critical minerals, which are often found in deep-seated deposits and have a lower recovery rate compared to bulk minerals like limestone and iron ore.

The move comes after the Centre faced a setback in its initial auction of critical mineral blocks earlier this year.

A total of 28 blocks out of the 38 announced in the first two auctions were annulled by the Centre due to a lack of interest from potential bidders.

Originally, the area limits were set under the Mines and Minerals (Development and Regulation) Act (MMDR) to prevent cartelisation in the mining sector.

However, given the strategic importance of critical minerals for various industries and national security, the government has decided to revise these limits.

“Critical minerals require extensive exploration and extraction efforts due to their deep-seated nature and low recovery rates from ore. Increasing the permissible area for mining and prospecting is crucial to make these operations economically feasible, said an official, adding that the decision is taken within the ambit of the MMDR Act.

The MMDR Act gives the Centre the power to increase the area but only if it is in the interest of development of a mineral or industry.

Areas of caution

As the Centre increases the area for individual players, sector experts emphasise the need to enhance technology to fully extract minerals from the mines.

Experts also call for monitoring the ecological impact of mining. They caution against using broad terms like ‘strategically important sector’ to bypass environmental concerns.

“There is an alarming trend of using broad terms such as ‘strategically importance’ and ‘national security’ to support certain sectors or industries. And then, selectively relaxing environmental compliances and public scrutiny. We must balance economic growth with the imperative to preserve our ecological wealth through stricter environmental norms and strong regulatory oversight,” said Debadityo Sinha, lead for climate & ecosystems at Vidhi Centre for Legal Policy.

Sinha emphasised the importance of conducting environmental impact assessments before taking policy decisions.

“It is also crucial to conduct 'Strategic Environmental Impact Assessments' before taking policy decisions. We often fail to account for externalities such as ecological, social, and health costs in our economic calculations. This is especially when the impact of climate change-induced events pose the greatest national threat,” he said.

Another expert said the government should not merely increase the area for mining but should also enhance the use of high-tech equipment to fully utilise the potential of mines.

The expert emphasised that extraction technologies need to undergo innovation to improve two key areas.

The first one is reducing the embodied carbon during the extraction process, which could impact future carbon border adjustment mechanism-related regulations. The second one is increasing efficiency in converting minerals to pure materials to generate more from existing ores.

Decoding the shift
 

For prospecting licences (granted in the case of composite licence), the limit will be increased from 25 sq km to 100 sq km
 

For mining leases, the area will be expanded from the current limit of 10 sq km to 50 sq km
 

Move comes after the Centre faced setback in initial auction of critical mineral blocks earlier this year
 

Experts emphasise need to enhance technology to fully extract mineral content from mines
 

They also call for monitoring ecological impact of mining. They caution against using broad terms to bypass environmental concerns