Lithium mining boosted by Mines Act amendments

On July 12, the cabinet approved amendments to the Mines and Minerals (Development and Regulation) Act, 1957, allowing mining of lithium and other minerals. The amendments aim to encourage exploration of deep-seated minerals.

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The Mines and Minerals (Development and Regulation) Act, 1957 underwent its fifth amendment on July 12, as approved by the Cabinet, aiming to facilitate the mining of lithium and other minerals. This amendment is expected to significantly benefit the prominence of lithium in the electric vehicle (EV) era.

Previous amendments to the Act, since 2014, included the introduction of e-auctions for mineral resources and the extension of expiring mining leases. The latest amendment proposes the inclusion of an exploration license provision, which will be granted through auctions for conducting reconnaissance and prospecting operations, according to an official.

The new changes allow companies to suggest specific areas in India that they wish to explore and eventually mine, deviating from the conventional government-defined blocks or mines for auction. The exploration license will be limited to deep-seated and critical minerals, specified in a new schedule to the Act.

Officials state that the amendment will enable the granting of mineral concessions for the entire spectrum of exploration activities, ranging from reconnaissance to prospecting operations. It is expected to incentivize private sector participation, particularly in the exploration of precious and critical minerals.

Junior mining companies will have the opportunity to acquire exploration rights based on existing baseline survey data. These companies will conduct exploration activities from the initial reconnaissance stage and bring the area up to the required level for commencing mining operations.

Additionally, the amendment allows companies to transfer the mineral concession in full or in part during the exploration period or upon the conclusion of exploration.

India currently possesses around 688,000 square kilometers of apparent geological potential areas, with 197,000 square kilometers identified as high-potential regions by the Geological Survey of India. Notably, only 1% of the global budget allocated for mineral exploration is currently spent in India.