What is the Mines and Minerals (Development and Regulation) Amendment Bill, 2023?

It was on July 26 that the Mines and Minerals (Development and Regulation) Amendment Bill, 2023 was presented in the Lok Sabha. The Bill seeks to make changes to the Mines and Minerals (Development and Regulation) Act of 1957. This act oversees the mining sector of the country.

For the purpose of regulating the mining sector, the Act bifurcates the activities related to mining into three broad categories. 

These categories are:

• Reconnaissance. This deals with a preliminary survey that helps in determining mineral resources.
• Prospecting. This involves exploring, fetching, and proving mineral deposits.
• Mining.  This is clearly the commercial act of extracting minerals.

The background so far:
The Mines and Minerals (Development and Regulation) Amendment Act of 1957 was amended in the year 2015. The purpose behind the amendment was to bring about an auction-based mineral concession allocation to bring about transparency and form the District Mineral Foundation (DMF) for the welfare of communities that are affected. It also sought to set up the National Mineral Exploration Trust (NMET) to encourage exploration, as well as introduce strict penalties in case of illegal mining.

However, in the years 2016 and 2020, the Act was amended again to look after specific emergent issues. The Act was last amended in the year 2021 to introduce further reforms in the sector. These reforms included eliminating the difference between merchant and captive mines.

Despite so many amendments, the mineral sector demanded further reforms specifically for enhancing mining and exploration of Critical Minerals that are in much need for national security and economic development in the nation.

Issues of disruption of supplies may result due to the lack of critical minerals or due to their concentration. Therefore, the Act needed further amendments to combat such challenges.

In light of the country's commitment to energy transition as well as hitting the milestone of Net-Zero emission by the year 2070, critical minerals have earned significant importance.

Let us understand the three categories, one by one.

Reconnaissance:

The Act states the meaning of reconnaissance acts as the operations that are undertaken for the purpose of preliminary prospecting. Such acts include aerial surveys, along with geochemical and geophysical surveys. Geological mapping is also one such activity. The Act does not allow drilling, pitting, sub-surface excavation, and trenching. The Bill, however, allows these prohibited acts.

Exploration: 

The Act offers concessions such as a reconnaissance permit for reconnaissance, a mining lease, a prospecting license, and a composite license. The Bill brings forward an exploration license that authorizes either prospecting or reconnaissance or even both activities in case of specified minerals.

Auction for the exploration license

The state government is going to grant the exploration license via competitive bidding. Details like the way of auction and the terms and conditions will be prescribed by the central government.

Maximum area in which the acts are allowed

As per the Act, activities in a region up to 25 square kilometers are allowed through a prospecting license. Activities for an area of 5,000 square kilometers are allowed in a single reconnaissance permit. 

Under a single exploration license, the Bill allows for activities in an area of 1,000 square kilometers.

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