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Offshore Mining of Non-Atomic Minerals

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.
India’s Offshore Mineral Resources
India’s Offshore Mineral Resources

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.

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In which year, the Parliament passed the Offshore Areas Mineral (Development and Regulations) act?

In 2002, the Parliament passed the Offshore Areas Mineral (Development and Regulations) act.

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