In a first, exploration licences to private agencies for mineral projects

In a first, the Ministry of Mines on Friday directly sanctioned exploration licences to five Notified Private Exploration Agencies (NPEAs) for critical and deep-seated mineral projects. These licensees selected by the Centre sans any auction process would, however, be allowed to participate in the auction of the said minerals, a privilege that was previously not granted.

“In order to give impetus to the exploration of critical and deep-seated minerals, the Ministry of Mines has launched a new scheme to directly sanction exploration projects to NPEAs for critical and deep-seated minerals. Further, the ministry has also allowed these NPEAs to bid for auction for mineral blocks explored by them which was not allowed earlier,” the ministry said in a statement.

A total of 17 projects, including 11 of critical minerals, provided to the five NPEAs are in Maharashtra, Madhya Pradesh, Chhattisgarh, Odisha, Gujarat and Karnataka.

Gemcokati Exploration, an NPEA in Maharashtra, acquired the highest six projects. Kolkata-based Maheshwari Mining secured four projects. Both Geovale Services and Geoexplore secured three projects each, while United Exploration received one project.

The exploration blocks will contain a variety of minerals, including iron ore, graphite, platinum group elements (PGE), gold, bauxite, nickel, cobalt, and rare earth elements (REE).

A total of Rs 15.88 crore have also been sanctioned from NMET funds, the ministry said. The government through NMET provides an incentive of 25 per cent of the approved project cost to exploration agencies.

Since March 2022, the ministry has notified 16 Private Exploration Agencies to take up exploration projects through state governments, funded by the National Mineral Exploration Trust (NMET).

The Mines and Minerals (Development and Regulation) Act, 1957, MMDR Act was amended through the MMDR Amendment Act, 2021, w.e.f. 28/3/2021 which, inter alia, empowers the central government to notify entities, including private entities, that may undertake prospecting operations.

On August 17, 2023, an amendment to the MMDR Act identified 24 minerals, including graphite, nickel, PGE, REE, potash, among others, as critical and strategic minerals. A comprehensive list of 29 minerals was included in the 'Seventh Schedule' of the Act, opening the possibility for these private exploration agencies to obtain exploration licenses for these minerals.

The decision to allow NPEAs to directly submit projects to the Ministry of Mines will help in cutting out delays in sanctioning projects as well as help in faster execution of projects.

The MMDR Act grants these exploration agencies the opportunity to participate in mining auctions for the mineral blocks they have explored. Enabling exploration agencies to bid for mining rights of the discovered minerals, the government's goal is to draw larger mining companies into the exploration sector.

The ministry anticipates that this provision will also encourage junior mining companies globally to engage in exploration projects in India, supported by NMET funding.