Mines ministry to set up project monitoring unit for faster mine operationalization

Gureddi also highlighted the low level of investment in mineral exploration, particularly in obvious geological potential (OGP) areas. These areas, covering 6.88 lakh square kilometres or one-fifth of India, hold the highest potential for discovering deep-seated, high-value minerals like gold, copper, and nickel.

Delays in operationalization

“Subsequent to implementation of MMDR Amendment Act in January, 2015, 1184 greenfield/virgin non-coal mineral blocks were proposed for auction, out of which only 404 could be auctioned so far for composite licences and mining leases. Moreover, it is a matter of serious concern that only 50 blocks comprising of 13 greenfield and 37 brownfield have come to a stage of production,” Gureddi said in his address. He attributed these delays to the need for nearly 20 statutory clearances from various central and state authorities before commencing mining operations.

In response, Kantha Rao acknowledged the issue and explained the steps the ministry has taken to address it. “The president has also highlighted that a lot of mines that have been auctioned need to be operationalized. That is true, both on the coal side, about 100 mines have been auctioned, and on the major mineral side, about 400 mines have been auctioned,” Kantha Rao said in response.

He added that the ministry has been working extensively to coordinate between different ministries and states to expedite the process.

“I am also happy to inform you that we are going to set up a PMU within the Ministry of Mines. PMU will now track [mines] in a more systematic manner than we do in our regular review meetings and state visits. There will be a fulltime 24×7 monitoring of the operationalization of these 400-500 mines that have been auctioned and more that will be auctioned through this PMU,” Kantha Rao announced. Notably, the Ministry of Coal had set up a PMU for facilitation of early operationalisation of coal mines in 2020.

‘Low spend on exploration’

Gureddi said India spends only 1 per cent of the global budget for exploration, amounting to $150 million compared to countries like Canada and Australia, which spend around $2.7 billion and $2.3 billion each. “As a result of negligible focus on exploration of the deep-seated and critical minerals in India, the production value of deep-seated minerals like lead, zinc, copper, gold, diamond etc. is only 5 percent of the total production of major minerals,” he added.

“Most of the OGP areas are accounted for by deep seated and high-value minerals… These are the minerals/metals for which India is dependent either wholly or substantially on imports. However, despite rich and potential geological prospectivity, India remains highly under-explored particularly for non-bulk and critical/strategic minerals,” Gureddi said.

In response, Kantha Rao said the ministry will ensure 100 per cent detailed exploration of OGP areas and is encouraging private exploration through its exploration licence (EL) regime introduced in August last year. Currently, 12 blocks are up for auction under the EL regime and the mines secretary encouraged companies to participate in the bidding process.

He also said the National Minerals Exploration Trust (NMET) is increasing expenditure on exploration. “Our expenditure in exploration is growing at a very fast pace. Just to give you an example, the expenditure under (NMET), which is basically funding all the exploration activities in the country, has doubled in the last year. That is, in 2023-34, we spent Rs 300 crore compared to the previous year where we spent Rs 160 crore. We have targets of reaching Rs 500 crore and even more than that in the coming five years under the Viksit Bharat programme,” he said.

Role of state governments

Kantha Rao highlighted that states play a big role in the operationalization of mines, especially as the regulation of mines and mineral development is a state subject. He added that the union mines ministry is encouraging states to undertake more reforms in their processes, the progress of which will be measured by the first iteration of the State Mining Index set to be out next year. The proposed Index is meant to “create a positive competition among states”, according to the mines secretary. He also revealed that the ministry has roped in FIMI to publish a report on best practices adopted across states.

“It is therefore worth examining as to why the States are indifferent to development of auctioned mineral blocks and their development despite garnering huge revenues and Central Government offering monetary incentives to promote competition among them,” Gureddi said.

To monitor and hasten the development of auctioned mines, Gureddi suggested the revival of the Post-Auction Mining Clearances and Approval Facilitator (PAMCAF), an inter-ministerial group constituted in 2016. “However, although a few meetings were reported to have taken place initially but it is gathered that no meeting of the Group has taken place since long and the same is not active as of now. I would therefore request Ministry of Mines to revive this Group for monitoring and facilitating the faster development of auctioned mineral blocks,” he said.

Gureddi also appealed to the central government to take legislative action with respect to a recent Supreme Court order allowing states to collect past tax dues from mining companies, after it ruled that royalty is not a tax.

“Considering the severity of the issue and to have stable tax regime for bolstering the growth of mining sector, we earnestly appeal that Government should take necessary legislative mitigating measures on an urgent basis by putting limitations on the taxation on mineral rights by the States and for giving prospective effect to the ruling of Hon’ble Supreme Court,” he said.