Mining rule tweak may be a game changer for EVs, shift to clean energy

The Lok Sabha okayed Bill to open critical mineral mining for private sector.

The Lok Sabha has given its approved the proposed changes to India’s mining rules to boost exploration, including allowing private players to search for critical metals like lithium, a key component of the electric vehicle (EV) industry.

Earlier this month, the union cabinet had approved amendments to the Mines and Minerals (Development and Regulation) Act, 1957, allowing for the mining of lithium and other minerals.

The Act empowers the government to auction mining leases and composite licences for certain critical metals, aiming to improve transparency in the allocation of metals from India’s offshore basins. A composite licence is a two-stage licence for exploration and production.

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Further, in case of atomic metals used in the manufacture of atomic energy, the grant of an exploration licence or production lease shall be made only to a government or public sector undertaking (PSU).

According to the objective of the bill, the amendments “would facilitate, encourage, and incentivise private sector participation in all spheres of mineral exploration for critical and deep-seated minerals.” It would remove lithium-bearing minerals and five other atomic metals from a restricted list.

The changes assume significance as it paves the way for the auctioning of recent lithium blocks identified in regions of Jammu & Kashmir and Karnataka.

Also Read: India considers lithium mining royalty at 3% of LME price: Report

Further, the statement mentioned that critical metals have gained significance in view of India's pledge towards energy transition and achieving net-zero emission by 2070. India wants to bolster its metals supply to cut dependence on imports and achieve Prime Minister Narendra Modi’s net-zero ambitions. The Centre is leaving no stone unturned to build local supplies of critical metals such as lithium as the world phases out petrol and diesel vehicles.

At present, New Delhi is dependent on imports to meet the demand for critical metals such as lithium, cobalt, nickel, and so on. Beijing accounts for 70 percent of supplies globally.

Also Read: Gradual shift from coal to other essential minerals likely in mining sector: RBI staff

Critical metals have a significant role in energy transition as they are used in batteries and wind turbines. This move will help establish a domestic supply chain to support the Centre's push for building up a chip manufacturing base in the country.

For the first time, the Centre recently published a list identifying 30 critical metals essential for the country’s economic development and national security. More importantly, for the first time the government is opening up the country’s huge metal-bearing offshore areas.

Compared to surficial or bulk metals, deep-seated minerals such as gold, silver, copper, zinc, nickel, lead, cobalt, platinum, and diamonds are expensive to explore and mine. These have been removed from the restricted list, and opened up for exploration and mining by private entities. Therefore, mining of these minerals is likely to increase considerably.

These minerals are also crucial for new age electronics, and in traditional sectors such as infrastructure, defence, and so on.

“These amendments will be a game changer. We are also going to produce 1 billion tonnes of coal and make India self-sufficient in energy,” Union Minister for Coal and Mines Pralhad Joshi told the Lok Sabha.