Center takes over critical mineral exploration as states underperform

State governments’ slow progress in auctioning exploration licenses

Of the 14 state governments to which blocks have been issued for exploration licences, only six have initiated the tender process for the 12 blocks.

Now the Ministry of Mines has issued an order stating that the central government will be responsible for notifying mining blocks and conducting their tenders.

This move will streamline the process and ensure more efficient allocation of resources.

Role of central government in granting exploration licenses

After successful completion of the auction, the central government will inform the state government about the preferred bidder.

The state government will then issue an exploration license to the bidder as per the rule.

This procedure is designed to ensure transparency and fairness in the allocation of exploration licenses for mineral resources.

Purpose of exploration license and private sector participation

The Mines and Minerals (Development and Regulation) Amendment Bill 2023 was amended last year to include provisions on exploration licences.

The purpose of these licenses was to encourage private sector participation in mineral exploration activities. The aim was to bring advanced technology, finance and expertise to this sector.

But exploration agencies have been hesitant to join India’s mineral exploration efforts due to states’ fragmented approach in bidding blocks.

Challenges facing specialist search organizations

Exploration license blocks are very large and specialist exploration organizations are needed to operate them.

When these blocks are auctioned separately by different states, these institutions have to agree with more than one state government to participate in the auctions.

This fragmented approach has led to a lack of response from private exploration organizations, further complicating the mineral resource exploration process in India.