Context: The Ministry of Mines has notified draft amendments to the Offshore Area Mineral (Development & Regulation) Act, 2002 (OAMDR Act), which will open up offshore mining to the private sector.
Key Highlights of the Draft Amendment
- About the amendment: This draft is a fresh attempt by the government to open up offshore mining to the private sector after two failed attempts by two different governments since 2002.
- The proposed changes aim to create a transparent mechanism for distributing concessions.
- Private sector participation: The move will pave the way for private sector participation in offshore mining of non-atomic minerals in India’s territorial waters along its 7,517-km coastline.
- Auction route: As an alternative to the renewal regime, it is proposed that production leases be granted through auction to private sector and state-controlled firms.
- Threshold: The proposed amendment gives powers to central government to fix the threshold value, above which the allocations will be given to state controlled entities.
- Joint Venture: A joint venture will be chosen through a competitive bidding process. A joint venture model in which public sector units (PSUs) hold the majority stake is also being considered.
- Atomic minerals: However, offshore mining of atomic minerals will continue to be monopolised by the state-owned enterprises.
- Offshore Areas Mineral Trust Fund: The amendment also proposes to set up a fund for exploration of offshore mining and mitigation of its adverse effects.
- The objective is to ensure availability of funds for exploration, mitigation of adverse impact of offshore mining, disaster management, research, etc.
- The fund will be non-lapsable and maintained under the Public Account of India.
- It will be funded by an additional levy, not exceeding one third of the royalty on the production of minerals.
Stats IQ: India’s Offshore Mineral Resources
- India has a 7,517-km-long coastline and is home to nine coastal states and four union territories with 1,382 islands.
- India’s Exclusive Economic Zone (EEZ) of over two million square kilometers holds significant recoverable resources of crude oil and natural gas, construction sand, heavy minerals, limemud, poly-metallic nodules and crust
- The Geological Survey of India (GSI) has estimated 79 million tonnes of heavy mineral resources; 1,53,996 million tonnes of lime mud in the Indian EEZ and 745 million tons of construction sand in the Territorial Water.
About the Offshore Area Mineral (Development & Regulation) Act, 2002 (OAMDR Act)
- In 2002, the Parliament passed the Offshore Areas Mineral (Development and Regulations) act.
- This Act aims at the development and regulation of mineral resources on specific marine territories such as territorial waters, exclusive economic zone, continental shelf, and other maritime zones of India.
- However, the act officially came into effect from 15th January 2010, vide an order dated 11th February 2020 notified by the Central Government.
- The Act provides mandates for all minerals in offshore areas. Even minerals listed under the Atomic Energy Act, 1962, are included in the said Act.
- However, it excludes oils and related hydrocarbons. Oils and hydrocarbons though are offshore minerals are dealt with under separate legislation.
- Current procedure for offshore mining: The government currently allocates offshore production leases for blocks containing higher grade atomic minerals, such as uranium and zircon to state controlled entities.