Govt notifies 16 pvt exploration firms for critical, deep-seated minerals

In a move to encourage private exploration of critical and deep-seated minerals in the country, the government for the first time has notified 16 private exploration agencies.

These private exploration agencies will now have the opportunity to obtain exploration licences for 29 minerals listed in the ‘Seventh Schedule’ of the Mines and Minerals (Development and Regulation) Act, 1957. Among these minerals are gold, silver, copper, cobalt, nickel, lead, potash, beryllium, and lithium, among others.

The private agencies notified by the Centre include Natural Resources Division-Tata Steel, Kartikay Exploration and Mining Services, Engeotech Consultant, Infrastructure Logistics, Novomine India, Ecomen Laboratories, Geo Exploration and Mining Solutions, Geo Marine Solutions, Maheshwari Mining, V. M. Salgaocar and Brother, Geovale Services, GeoExpOre, Gemcokati Exploration, Geotechnical Mining Solutions, United Exploration India, and Indian Mine Planners and Consultants.

These agencies will need to engage in competitive bidding processes initiated by the state government to secure an exploration licence. Upon securing the bid, they will gain permission to conduct pitting, trenching, drilling, and sub-surface excavation for the purpose of carrying out reconnaissance and prospecting operations.

Until now, only government agencies such as the Geological Survey of India (GSI) and Mineral Exploration and Consultancy Limited (MECL) were conducting exploration activities in the country. Despite the government designating 25 government agencies as eligible to conduct exploration activities within the country, GSI and MECL accounted for 100 per cent of the conducted explorations.

In a bid to encourage private participation in exploration endeavours, the government will provide a financial incentive of up to 25 per cent of the approved cost of exploration.

The government is also actively engaged in identifying regions where private agencies could potentially participate in exploration activities. “Up to this point, the entirety of exploration activities has been undertaken by GSI and MECL. The government is now seeking to identify regions where exploration licences could be granted to private entities,” a source aware of the development said.

In the ongoing fiscal year, the government has commenced 125 fresh projects dedicated to exploring critical minerals. However, all these projects are being executed by government agencies.

The exploration requires techniques that are highly specialised, time-intensive, and monetarily risky operations. While Indian public sector undertakings were in a relatively better position to explore surficial and bulk minerals like coal and iron ore, they had not fared well when it came to deep-seated and critical minerals owing to high expenditure and long duration of risky projects while being under pressure to increase the supply of bulk minerals.

It is estimated that India has explored just 10 per cent of its Obvious Geological Potential (OGP), less than 2 per cent of which is mined, and the country spends less than 1 per cent of the global mineral exploration budget.

Despite possessing 6 per cent of the world's 120,000 million tonnes of rare earth reserves, India's contribution to global output remains at only 1 per cent. This disparity can be attributed to factors such as limited private participation, stringent regulations, and a lack of advanced technology.

The private exploration allows entry of national and international private mining firms, called junior explorers, to engage in risk-taking by putting their expertise and limited financials into explorations to find potential mines, which will help tap its unexplored mineral resources.

Data pointers

- GSI and MECL currently oversee all exploration activities

- 25 government agencies have been notified for exploration endeavours

- A total of 16 private agencies, including Natural Resources Division-Tata Steel, are part of the exploration initiative

- Government agencies are conducting 125 exploration projects in the fiscal year 2023