State Governments Grant Exploration License (EL) in Critical Mineral Reserves by Issuing NITs
Exploration License
Exploration License (EL): Taking significant strides towards unlocking the potential of critical and deep-seated minerals, the states of Karnataka, Rajasthan, Maharashtra, Madhya Pradesh, Andhra Pradesh and Chhattisgarh have issued Notice Inviting Tenders (NIT) for the auction of Exploration License (EL).
The Exploration License regime has been introduced through amendment to the Mines and Minerals (Development and Regulation) Act, 1957 effect from 17.08.2023, to further boost exploration and mining of 29 critical and deep-seated minerals in the country. Exploration License can be granted for minerals specified in Seventh Schedule through auction. Process for grant of Exploration Licence has been notified through the Mineral (Auction) Amendment Rules, 2024.
The State Governments of Karnataka and Rajasthan were the first States to notify the auction of Exploration License (EL) for critical and deep seated minerals on March 6th 2024. Karnataka launched auction of one block of Gold, Copper and Lithium in Raichur & Yadgir districts and Rajasthan launched auction of three blocks of Rare Earth Elements, Rare Metal and Potash minerals in Barmer, Jodhpur, Hanumangarh, Churu, Bikaner, Sri Ganganagar, Jaipur, Nagaur and Sikar districts.
This momentum continued with Maharashtra announcing its NIT for two EL blocks on March 7, 2024, followed by Madhya Pradesh and Andhra Pradesh with two and one EL blocks respectively on March 11th 2024, and Chhattisgarh with three EL blocks on March 13, 2024 leading the total tally to 12 EL blocks expanding the reach of the Exploration License regime nationwide.
Maharashtra issued NIT for two EL blocks of Lead, Zinc & Copper (Base Metal), and Diamond in Gadchiroli district, Madhya Pradesh issued NIT for two EL blocks of Diamond with Copper, Lead, Zinc, and associated minerals (Base Metal), PGE & Associated minerals in Shivpuri, Gwalior and Betul Districts whereas Andhra Pradesh has issued NIT for one block of Rare Earth Element in Chittoor and Tirupati Districts. Further, Govt. of Chhattisgarh issued NIT for three EL blocks for Diamond and Rare Earth Group Minerals in the districts of Konda Goan, Narayanpur and Bastar.
In order to expedite the launch of NIT for auction of Exploration License, State Governments worked tirelessly to prepare the blocks for auction and Central Government provided the necessary prior approval for auction. To further support and hand hold the State Governments, the model tender document for auction for grant of Exploration License was provided by Ministry of Mines on 01.03.2024.
The Exploration License regime is aimed at expediting the exploration of critical minerals such as lithium, copper, silver, diamond, and gold, involves active participation from the private sector. Through the auction process, the licensee will be permitted to conduct reconnaissance and prospecting operations to identify viable mining areas. The license holder will get share of revenue from auction premium for 50 years as per the auction bid. Further, the EL holder can transfer the license after the execution of the EL.
Exploration Licence holders will play a pivotal role in exploring the blocks and identifying areas suitable for Mining Lease auctions, potentially bolstering revenue for state governments. The auction process for Exploration Licences will utilize reverse bidding, with bidders quoting the percentage share they will take in the auction premium payable by the Mining Lease holder. The bidder with the lowest percentage bid will be selected as the preferred bidder for the exploration licence.
This concerted effort by the States of Karnataka, Rajasthan, Maharashtra, Madhya Pradesh, Andhra Pradesh and Chhattisgarh underscores their commitment to harnessing the potential of critical minerals, fostering economic growth, and advancing the exploration landscape in India.
Source: https://pib.gov.in/
