Centre to issue mineral exploration rights, takes the task away from states

The Centre has introduced a new scheme allowing itself to issue mineral exploration licences for all major minerals, excluding atomic minerals, to private agencies. Previously, this responsibility rested with mineral-rich states.

According to a Ministry of Mines notification dated June 27, the scheme for engagement of notified private exploration agencies (NPEA) in mineral exploration, administered through the National Mineral Exploration Trust (NMET), enables the Union government to directly grant mineral concessions for a full spectrum of exploration activities, from reconnaissance to prospecting operations.
 

In 2016, the Centre launched the National Mineral Exploration Policy to promote private sector participation in mineral exploration.
 

In 2021, amendments to the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) empowered state governments to notify private sector entities for prospecting operations.
 

Despite these efforts, private sector involvement in mineral exploration remained limited. In 2023, further amendments to the MMDR Act granted the Centre authority to issue exploration licences for 29 critical and strategic minerals to NPEAs.
 

Delays in state approval of NPEA exploration projects and funding disbursement through state channels prompted the introduction of this new scheme, according to the notification.
 

The initiative aims to attract major mining firms to India’s exploration sector and global junior mining companies to participate in projects funded by NMET. It also seeks to introduce advanced exploration technologies. Currently, NMET manages a fund exceeding ~5,000 crore.
 

NMET, a government entity, funds and promotes mineral exploration in India to enhance exploration activities and encourage private sector engagement.

Since the 2021 amendment enabling state notification of private exploration agencies, the Ministry of Mines reports that 22 agencies have been notified, conducting 31 projects across various commodities using NMET funds totalling around ~35.23 crore. Roughly 80 per cent of these projects focus on critical minerals.
 

India has explored only 10 per cent of its Obvious Geological Potential (OGP), with less than 2 per cent mined. The country allocates less than 1 per cent of the global mineral exploration budget. 
 

According to mines ministry data, around 200,000 square kilometres of OGP area is yet to be reconnoitered by government agencies.
 

Globally, exploration of deep-seated minerals is typically conducted by junior mining companies, which obtain exploration rights over extensive areas.
 

Until now, exploration activities in India were primarily conducted by government agencies such as the Geological Survey of India (GSI) and Mineral Exploration and Consultancy (MECL). Despite 25 government agencies being eligible to conduct exploration activities, GSI and MECL accounted for 100 per cent of these explorations.
 

Exploration requires techniques that are highly specialised, time-intensive, and monetarily risky. While Indian public sector undertakings were in a relatively proficient in exploring surficial and bulk minerals like coal and iron ore, they faced challenges in exploring deep-seated and critical minerals due to high costs, lengthy project durations, and pressure to increase bulk mineral supplies.

 

Making amends
 

Delays in state approval of NPEA exploration projects and funding disbursement through state channels prompted the introduction of the new scheme
 

The scheme enables the Centre to directly grant mineral concessions for a full spectrum of exploration activities
 

In 2016, the Centre launched the National Mineral Exploration Policy to promote private sector participation in mineral exploration