PSUs to get exclusive rights to offshore mineral blocks

New Delhi: Strategically important large offshore mineral blocks will be set aside for public sector units in response to Chinese deep sea mining, two persons privy to the plans said.

These strategic blocks would be offered only to nominated PSUs, and without any auction. The move comes in the backdrop of China’s global ambitions in deep-sea mining.

Stringent regulations for offshore mining form part of amendments to the OffShore Areas Mineral (Development and Regulation) Act 2002 (OAMDR) which the government plans to introduce and pass in the coming monsoon session of Parliament, one of the two persons said.

The amendment bill aims to improve transparency in the allocation of mineral resources, with a provision for granting production lease only through auction.

Nonetheless, government entities will likely maintain a significant presence in offshore areas, while private companies will be encouraged to contribute cutting-edge technologies for the execution of complex mining operations.

As per the proposals in the draft amendment bill, mineral concessions will be granted without any competitive bidding to state corporations in mineral-rich areas reserved by the central government. The bill also provides for grant of exploration licence or production lease only to a government company in case the quality minerals in that particular area is equal to or above the threshold value. The threshold value will be decided by the Centre when rules governing the changes in the Act are finalized, the person said. It is expected that in each area earmarked for mining, there would be at least one government company.

Queries sent to the ministry of mines, which will finalise the changes to the OAMDR Act and prepare a note for cabinet approval, remained unanswered till the time of going to press.

This is the first time the government is opening up the country’s vast mineral-bearing offshore areas. Extraction of minerals from these areas will also serve India’s strategic interests and give it a stronger hold in its territorial waters that otherwise also sees constant threat of ingression by neighbouring countries.

The Geological Survey of India (GSI) estimates 79 million tonnes of heavy minerals. As India aims to become a high-growth economy, it needs to harness its maritime resources to its optimal capacity. Through reconnaissance survey, GSI has been able to delineate preliminary resources for heavy minerals in the inner-shelf and mid-shelf regions off Odisha, Andhra Pradesh, Kerala, Tamil Nadu and Maharashtra.

India has a unique maritime location. Its 7,517-km coastline is home to nine coastal states, four union territories and 1,382 islands. India’s exclusive economic zone of over two million square kilometres holds significant recoverable resources of crude oil and natural gas, construction sand, heavy minerals, lime mud, poly-metallic nodules and crust.

To ensure the availability of funds for exploration, mitigation of adverse impact of offshore mining, disaster management and research, a provision has been made for setting up a non-lapsable Offshore Areas Mineral Trust which will maintain a fund under the Public Account of India. This will be made up of an additional levy.

The exact rate of additional levy will be prescribed by the government post parliamentary approval of the amendment.

The Parliament enacted the OAMDR Act, 2002 to provide for development and regulation of mineral resources in offshore areas which include the territorial waters, continental shelf, exclusive economic zone and other maritime zones of India.