Govt opens up mining of new set of minerals to reduce imports
Premium- Cabinet approves totality rates for Glauconite, Potash, Emerald, Andalusite, Sillimanite and Molybdenum
The government on Wednesday opened up mining of new groups of minerals as part of its strategy to boost domestic production and push import substitution.
The Union cabinet approved the proposal of the ministry of mines for amending the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR) to specify the rate of royalty for Glauconite, Potash, Emerald, Platinum Group of Metals (PGM), Andalusite, Sillimanite and Molybdenum.
Glauconite and Potash are used as fertilizer in agriculture. Platinum group of metals and Andalusite and Molybdenum are high-value minerals used across industries.
This approval will allow auction of these mineral blocks, thereby reducing imports and generating opportunities in mining and manufacturing sectors, a government statement on the cabinet decision said.
The rate of royalty for Andalusite, Sillimanite and Kyanite, which are mineral polymorphs, have been kept at the same level.
The approval will lead to import substitution in respect of many important minerals, thereby saving valuable forex reserves. It will also reduce country’s foreign dependency through local production of minerals, the statement said.
The approval would ensure auction of mineral blocks in respect of Glauconite, Potash, Emerald, Platinum Group of metals, Andalusite and Molybdenum for the first time in the country.
The MMDR Act was amended in 2015 to usher in a new regime of granting mineral concessions through auction to ensure transparency and non-discrimination in allocation of mineral wealth of the country.
The auction regime has matured since then. To give further impetus to the mineral sector, the Act was further amended in 2021.
The government has given a major boost to the auction of mineral blocks, increasing production, improving ease of doing business in the country and increasing contribution of mineral production to gross domestic product (GDP).
The ministry of mines has also taken steps to increase exploration of minerals, which has led to the availability of more blocks for auction.
Exploration activities have increased not only for traditional minerals such as iron ore, bauxite, limestone but also for deep-seated minerals, fertilizer minerals, critical minerals and minerals which are imported.
In the last 4-5 years, central agencies such as the Geological Survey of India and Mineral Exploration Corporation Ltd have carried out exploration and handed the reports to the states.
India is currently dependent on imports of Glauconite/ Potash, Emerald, Platinum Group of Metals (PGM), Andalusite and Molybdenum. As a step towards self-sufficiency, states have identified such mineral blocks for auction.
However, the rate of royalty for these minerals were not separately provided and was not appropriate for giving impetus to mining of these minerals.
Accordingly, the ministry proposed reasonable rates of royalty in order to encourage better participation in auction, which has been approved by the Union cabinet.
These rates have been fixed after extensive consultations with the states and the various ministries/departments of the central government, the statement said, adding that the ministry of mines will also provide methodology for calculation of average sale price (ASP) of these minerals required for enabling auction of these mineral blocks.
With the active cooperation of states, more than 145 mineral blocks have been successfully auctioned in the country.
With further impetus given by the reforms made in 2021, more than 146 blocks have been put up for sale in fiscal 2022. Of these, 34 have been successfully auctioned.
Specification of royalty and ASP for the new set of minerals would increase the number of blocks for auction.
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