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.

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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