New regulations to boost mineral mining and revenue sharing in India

Miners may receive revenue shares and exploration rights for deep-seated minerals under the amended Mines and Minerals Act, aiming to enhance mineral exploration and domestic production

In a recent development, miners who discover critical and deep-seated minerals in India could soon be entitled to revenue shares from the mining blocks over the span of a 50-year lease period, according to a report by Mint.

This strategic move also includes the possibility of granting miners the authority to extract mineral blocks from surveyed areas that will later be auctioned for mining leases. Such provisions aim to ensure a consistent income stream for the mining entities across multiple mines harbouring diverse mineral deposits.

These significant changes are part of the forthcoming regulations for Exploration Licences (EL), which will be introduced following the approval of amendments to the Mines and Minerals (Development and Regulation) Act during the recent monsoon session of the Parliament.

 

The envisaged revenue-sharing strategy aims to attract junior mining companies into mineral exploration. This strategic move is anticipated to foster the discovery and extraction of 29 critical and deep-seated minerals, including in-demand resources like lithium, copper, gold, silver, diamond, molybdenum, and cadmium, many of which are currently imported.

The finalisation of new EL rules is slated for the upcoming weeks. The issuance of the initial set of licenses is projected to take place before the end of the year.

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The bid criteria for EL will hinge on the percentage revenue share that the license holder will receive from the auction premium paid by the lessee to the state government during a successful mining lease auction for the entire 50-year lease duration.

These licenses are valid for five years, extendable by an additional year. According to the conditions, the licensee must release 75 per cent of the area within three years, retaining only 25 per cent. After completing the exploration, the state government will initiate an auction for the mining lease area within a year of receiving the Geological Report from the Exploration License holder. If the state government fails to conduct the lease auction within the stipulated period, the central government reserves the right to undertake the auction.