Centre to set out area limits for mineral mining in states

Source: The post is based on the article “Centre to set out area limits for mineral mining in states” published in The Hindu on 27th September 2022

What is the News?

The Government of India is preparing to set out area caps for mining as it aims to carve out smaller mining areas to attract more investors.

What is the current method of allocating mining areas?

Currently, in the mining process, the government first identifies large areas that could have probable mineral reserves and offers them to companies for initial testing. 

Once the probable mineral resource is established, a prospecting license(PL) is given where licensees get to do more exploration to establish the possible mineral resources. 

Then, they apply for a mining lease(ML) for a particular area to extract the resource. Essentially, PL is granted for undertaking “prospecting operations” to explore, locate or prove mineral deposits while ML is granted for the actual mining operation.

What are the changes the government is planning to bring now?

The Government of India is preparing to set out area caps for mining as it aims to carve out smaller mining areas to attract more investors. 

This move will also prevent vast tracts of land irregularly ending up with a few miners, which would undermine the very purpose of auctioning mineral concessions through a fair and transparent mechanism. 

All states will have to follow the area limits for various minerals including iron ore, diamond, bauxite, gold and copper while auctioning resources and changes would require permission from the Center. 

These changes will be brought through an amendment of the Mines and Minerals (Development and Regulation) Act, 1957.