HomeBUSINESSPvt cos may get to mine lithium in reforms push

Pvt cos may get to mine lithium in reforms push

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NEW DELHI : The government plans to introduce several changes to mining laws, including allowing companies to sell half of their output from captive mines without end-use restrictions and eliminating the onerous forestry clearance process for prospecting operations.

Six key amendments to the Mines and Minerals (Development and Regulation) Act, 1957, are proposed to be introduced in the monsoon session of Parliament, an official aware of the development said. “The amendments aim to get more investments in the mining sector and allow the country to become self-reliant in several minerals and boost production,” the official said, requesting anonymity.

The official added that stakeholder consultations for the proposed changes were almost complete, and the mines ministry would soon send a final note on the amendments for Cabinet approval.

Among the changes proposed by the mining ministry is removing lithium-bearing minerals, a key raw material for batteries, from the restricted list of atomic minerals, allowing the government to auction mining concessions to the private sector.

The change is expected to boost production of lithium-ion battery manufacturing in the country, helping the country’s fast-growing electric vehicle industry.

The proposal also aims to remove lithium from the list of atomic minerals where permission to mine could only be granted by the Centre to state-run companies.

The proposed amendment also aims to include eight of the 12 atomic minerals, including lithium-bearing minerals, zirconium-bearing minerals, and beach sand minerals, titanium-bearing minerals, minerals of rare earth group containing uranium and thorium, into a new category—critical and strategic minerals. The Centre would be empowered to give concessions for these minerals to both public and private sector mining companies.

The reform proposals also include allowing states to grant composite licences without needing to secure approval from the Centre. This is expected to speed up the auctions of blocks containing composite minerals.

A query sent to the ministry of mines remained unanswered till the time of going to press.

Increased spending on infrastructure development and demand from automotive companies are driving growth in the metals and mining sector in India. Demand for metal and metal products is also rising as India expands domestic manufacturing. The reform measures are also expected to address supply-side constraints, the official said.

The amendments also propose to raise and fix mineral-wise maximum area limits for mineral concessions to provide larger mining areas to investors.

Accordingly, for prime minerals such as iron ore, the maximum area for prospecting licence and mining lease has been doubled to 50 sq. km and 20 sq. km, respectively. This would allow private miners to get the same land area for mining as was being given to state-run companies earlier without the need for central approval.

Among other changes, the Centre has also decided to exclude duties and levies (ex-mine price) such as goods and services tax, export duty, royalty, District Mineral Foundation, and National Mineral Exploration Trust while calculating the average sale price of minerals.

This will restrict the charge of royalty over royalty and limit the tax burden on companies and improve realizations for the government in mineral concession auctions.

The proposed changes on the sale of minerals from captive mines would do away with the existing provision where the sale of 50% of minerals can start after the need of the end-use plant is met. This provision held up the development of mining operations as companies where end-use plants were shut or still under development could not mine minerals.

Another major restrictive provision was the need to get forestry clearance, including a forest diversion plan for mineral reconnaissance permit and prospecting licence, even though the activity involves only a survey of the mineral-bearing land before permission is granted for non-forestry activities.

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