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Current Affairs for IAS Preparation - National Mineral Exploration Policy 2016

Sep 29, 2016 16:28 IST

    To study Current Affairs Analysis topics is very important during IAS Preparation. The questions generally asked in IAS Mains Exam have to be answered critically. The IAS aspirants have to study Current Affairs Topics critically and they must have proper analysis of respective topics. Here, we have provided the critical Analysis of the National Mineral Exploration Policy 2016, quite important in terms of IAS Mains Exam.

    Introduction

    The National Mineral Exploration Policy, 2016 has been released by the Ministry of Mines in July, 2016. The policy provides a complete action plan to ensure the comprehensive exploration of mineral resources, non-fuel or non-coal in the country.  The primary aim of the policy is to accelerate the exploration activity through enhanced participation of the private sector. It has been observed that the mineral sector of the country requires a proper action plan for comprehensive exploration with an optimal use of its mineral potential so that the sectoral contribution towards the economy can be maximised.


    The major emphases of the policy are:

    • To make available baseline geo-scientific data of the world standard in the public domain free of charge
    • Quality research to be done under PPP (public-private partnership) model
    • To take special initiatives for search of deep-seated and concealed deposits
    • To do quick aero-geophysical surveys of the country
    • To create a dedicated geo-science database

    Background of the Policy

    The exploration activity done in the country could be divided under two organisational frameworks:

    1. The institutional and administrative framework: Through this framework, the precompetitive baseline data generation and exploration work is implemented. The Geological Survey of India (GSI), the most important institution executed the chore of regional exploration of coal, lignite and non-fuel minerals in the country. GSI is also committed to perform the task of geological mapping and acquiring other baseline geo-science data for the entire country. It generates and makes available baseline geo-science data to other exploration agencies for accelerating the mineral exploration process. Directorates of Geology and Mines of some of the States have also made notable contributions in detailed exploration. Besides, Mineral Exploration Corporation Limited (MECL) and other Public Sector Undertakings carry out detailed exploration.

    After independence, GSI and the States have discovered 60 important mineral deposits including 38 ‘Greenfield’ discoveries throughout the country. After analysing the actual mineral potential of the country, it requires an urgent initiative for accelerating exploration in the country through public and private participation.

    2. The legal and regulatory framework: It commands the activities of various players in the sector, including the Government and the private sector. Mines and Mineral (Development and Regulation) Act, 1957 is the main statute for the regulation of mines and mineral sector in the country. Under this Act, Mineral Concession Rules, 1960 and Mineral Conservation and Development Rules, 1988 were framed.

    In keeping the view of economic liberalization in 1991, subsequently a comprehensive National Mineral Policy was announced in March 1993. The idea of encouraging private investment in exploration in mining was ascertained under the policy for the first in 1993. The policy introduced for the first time the idea of encouraging private investment in exploration in mining.

    Following the need of private investment in mining, several amendments were made in the MMDR Act in January 1994. These amendments sought to simplify the procedure for grant of mineral concession so as to attract large investment through private sector participation, including foreign direct investment (FDI), and thereby, induct latest technology into the mining sector.

    Despite the several attempts, the exploration activity could not be performed to the desired level. Further in December 1999, based on the recommendations made by an expert group, the MMDR Act was amended. The amendments lead to find out the concept of reconnaissance operations as a distinct stage prior to prospecting, in terms of reconnaissance permit (RP). The RP holder had the preferential right for obtaining PL, and then ML subject to stipulated conditions.
    Further in February 2006, the policy was liberalised and 100% FDI through automatic route was allowed in mining sector. However, the policy unable to attract the interested companies to perform exploration activity in the country and then the government planned to find out the major faults in the policy. In this backdrop, a High Level Committee (HLC) was constituted by the Planning Commission in the year 2005 to suggest the changes needed for encouraging investment of public and private sector in exploration and extraction of minerals.

    In the year 2008, revised National Mineral Policy was announced which was based on the recommendations provided by the High Level Committee (HLC).

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    Recent Policy Initiatives

    The limited success of earlier policy measures, as well as the requirements of the new emerging imperatives, has led to the amendments made to the MMDR Act by the Amendment Act of 2015. The most important feature of this amendment is the grant of mining leases and composite licenses (prospecting licence-cum-mining lease) only through an auction process. The Mineral (Evidence and Mineral Contents) Rules 2015 specifies that for auction of mining lease, at least general exploration (G2) is required to be completed and for auction of composite licence, at least preliminary exploration (G3) to be completed. The amended Act also removed the earlier provision of RP and provided for non-exclusive reconnaissance permit (NERP). However, the holder of such NERP shall not be entitled to make any claim for grant of PL-cum-ML or ML. The amended Act also removed the restriction on lease transferability and allowed the transfer of mineral concession held by lease holders to any person eligible to hold such lease.

    In the light of above amendments in MMDR Act and emergent need to provide an impetus to exploration in the country at this juncture has prompted a thorough review of exploration policy and strategy. The review revealed several areas that need added emphasis. A new Exploration Strategy has, therefore, been finalized with a view to provide new sense of purpose and direction within the amended legal framework.

    Main features of National Mineral Exploration Policy for clearing the way for exploration of minerals in the country:

    i. In case of exploration of identified block leads to auctionable resources then the Ministry of Mines will carry out auctioning of such block for exploration by private sector on desired revenue sharing basis.

    ii. In case the explorer agencies not able to discover any auctionable resources, then their exploration expenditure will be reimbursed on normative cost basis.

    iii. Creation of baseline geo-scientific data as a public good for open dissemination free of charge.

    iv. Government will carry out a National Aero-geophysical Program for acquiring state-of-the-art baseline data for targeting concealed mineral deposits.

    v. A National Geo-scientific Data Repository is proposed to be set up to collate all baseline and mineral exploration information generated by various central & state government agencies and also mineral concession holders and to maintain these on geospatial database.

    vi. Government proposes to establish a not-for-profit autonomous institution that will be known as the National Centre for Mineral Targeting (NCMT) in collaboration with scientific and research bodies, universities and industry for scientific and technological research to address the mineral exploration challenges in the country.

    vii. Provisions for inviting private investment in exploration through attractive revenue sharing models.

    viii. On the lines of UNCOVER project of Australia, the government intends to launch a special initiative to probe deep-seated/ concealed minerals deposits in the country in collaboration with National Geophysical Research Institute and the proposed NCMT and Geo-science Australia.

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    Major Impacts of National Mineral Exploration Policy are:

    i. The pre-competitive baseline geo-scientific data will be created as a public good and will be fully available for open dissemination free of charge. This is expected to benefit public and private exploration agencies.

    ii. The scientific and research bodies, universities and industry will work together for the scientific and technological development necessary for exploration in public- private partnership.

    iii. Government will launch a special initiative to probe deep-seated/concealed mineral deposits in the country. Characterizing India's geological cover, investigating India's lithospheric architecture, resolving 4D geodynamic and metallogenic evolution, and detecting and characterizing the distal footprints of ore deposits, would be the main components of this initiative.

    iv. A National Aero-geophysical Mapping program will be launched to map the entire country with low altitude and close space flight to delineate the deep-seated and concealed mineral deposits.

    v. Government will engage private agencies for carrying out exploration in identified blocks / areas with the right to certain share in the revenue accruing to the State government through auction.

    vi. Public expenditure on regional and detailed exploration will be prioritized and subject to periodical review based on assessment of criticality and strategic interests.

    Critical Appraisal

    i. Despite of successive amendments in Mines and Mineral (Development and Regulation) Act, the government is unable to woo the private investment for mineral exploration in the country. However, the government is unable to break the jinx of monopoly of the state-owned behemoth Geological Survey of India and Mineral Exploration Corporation Ltd.

    ii. The major drawbacks of the existing and the previous policies are that it unable to wipe out the procedural complexities for obtaining clearance from various authorities and the existing procedure for grant of mineral concession over the years.

    iii. Another challenge is the UNFC exploration guidelines which state that a minimum number of bore holes per unit area to be drilled for various levels of exploration, creates a major hurdles for aspiring players who seeks clearance for mineral exploration.

    iv. According to the recent exploration guidelines of the Ministry of Environment, Forest and Climate Change (MoEF&CC) do not provide for automatic approval of exploration to be carried out in compliance with UNFC guidelines. The Ministry of Mines has still in the process to move in the direction of automatic approvals for the exploration levels mandated by UNFC which is a long way to achieve.

    v. One of the major challenges for the mining sector is the lack of resources. The public sector agencies such as GSI and MECL and State governments’ agencies lack of adequate resources running inefficiently. Due to this the applications submitted by various companies for reconnaissance permits (RPs) and Prospecting Licenses (PLs) but very few of them have been finally converted into MLs.

    Way Forward

    To make available baseline geo-scientific data: It has been observed that there is an urgent requirement of collecting aero-geophysical data on a uniform flight height and spacing. For this, the GSI has already taken the initiative through National Airborne Geophysical Mapping Program (NAGMP) which involves acquisition of aero-magnetic and gravity data.  National Geochemical Map ping in an area of 5.4 lakh sq km in the entire country already been done by GSI till the year 2015.

    Need of Periodical Review of Obvious Geological Potential (OGP): There must be a evaluation of the mineral potential of geological terrains by incorporating the basic geo-scientific data and exploration data as and when it is available. Hence,  the  concept  of  OGP  is  dynamic  and  needs  to  be  revisited  periodically  with  the updation of database for various mineral commodities.

    To target the Deep Seated/Concealed Mineral Deposits: India needs to launch initiatives to target concealed mineral deposits. In 2010, such initiative named UNCOVER, is launched by Australia as they have almost exhausted easily discoverable near-surface resources. UNCOVER is laced with application of advanced geophysical techniques like DSRS, Magneto Tellurics (MT) in conjunction with high resolution geochemistry and geochronology. India should take should take such initiatives immediately on pilot basis.

    Need of Prioritization of Publicly Funded Regional and Detailed Exploration: In order to narrow down trade deficit and also give thrust to exploration for high value forex mineral commodities with an emphasis towards which the country is deficient within OGP are the main concerns. Priorities for the commodities are to be given for both regional and detailed exploration keeping in view the India's priorities.  The list of commodities are Fertilizer minerals (Potash  and  Sulphur), Basemetals, Molybdenum,  Nickel,  Tungsten,  Cobalt,  Antimony, Tin, Rare Earths & Rare Metals (RMRE), Lithium, Bismuth, Selenium, Platinum Group of Metals (PGE) are to be given priority by government as private and public exploration is negligible for the above mentioned commodities except for basemetals as reflected in the RP analysis.

    Need of Private sector in Mineral Exploration: Government’s objective is to facilitate, encourage and incentivize private sector participation in all spheres of mineral exploration. Government thereby hope to harness the technical expertise, technological capability and the financial resources of the private sector to discover and exploit the country’s vast mineral resources.

    Conclusion

    It has been noted that the Government has willingness to do some better in the mines sector. Over the years several amendments in Mines and Mineral (Development and Regulation) Act 1957 been done so far but still have scope to do more in this. On the primary basis the government should look forward to implement the ambitious Mineral Exploration Policy of 2016. In the policy the government has focus on the lacking part of the previous policies due to which the mining sector was in back foot in terms of contribution of the sector toward GDP of the Economy. The government should focus to create the National Centres for Mineral Targeting so that more mineral exploration discoveries of economic significance could be increased.

    India should adopt technologies using by the mineral rich nations like Australia, Canada, and Portugal as they have done significant steps to explore their mineral treasury. In order to explore its optimal level of mineral potential, India should make more lucrative and incentivized policies so that the private investors come forward and carry out cost effective and sustainable mineral exploration in the country.

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