Indian seabed mining licences to go under hammer soon

india

Subhash Narayan | Financial Chronicle | May 23 2016

62 sites identified to unlock zirconium, titanium and other treasures

After oil and gas sector, the government plans to throw open India’s vast coastline for mining of precious minerals. This is part of its plan to reduce the country’s dependence on imported minerals and promote the Make in India initiative. A new national mineral exploration policy (NMEP), being framed, will, among other things, lay emphasis on mining in offshore areas. This would pave the way for exploration and mining of blocks estimated to contain rich deposits of minerals such as zirconium, titanium, thorium, tungsten and rare earth elements.

“We have already identified about 62 sites in both east and west coast of India for mining, where the process of auction would be started very soon,” mines secretary Balvinder Kumar told Financial Chronicle.

He said that rules for exploitation of these deposits would be ready in a month’s time, following which, blocks could be put up for bidding. Last year, the mines ministry had set up a committee to frame rules under the Offshore Development and Regulation Act.

The blocks are located in offshore areas of Andhra Pradesh, Odisha, Maharashtra, Kerala, and Tamil Nadu. The mines ministry has already taken clearance from the defence ministry for these blocks to prevent delays in its exploitation.

The government had decided to allot 62 offshore blocks in 2012 as well, but the lack of proper regulations put several of these under litigation and no progress was made.

The mines ministry would re-allot some of these blocks under the new regulations that would also be guided by the NMEP. The mines ministry has already finalised a cabinet note for policy, which would be cleared soon, Kumar said.

The offshore mineral blocks have been identified by the Geological Survey of India (GSI), that carries out surveys in the exclusive economic zone (EEZ) and territorial waters (TW) of India to assess the potential of resources.

India’s TW extends up to 12 nautical miles (around 22 km) from the coast. With regard to EEZ, the country enjoys special rights in this sea zone for carrying out exploration as well as to exploit marine resources, including energy production from water and wind.

“Offshore mining is expected to give the country access to minerals that are currently not being exploited. Output from such activity will help reduce our import dependence,” Kumar said.

Apart from zirconium, titanium, thorium, tungsten and rare earth elements that would be found in sand deposits beneath the surface of the sea, offshore areas could also be source of industrial minerals such as diamond, sapphire, garnet manganese and phosphatic sediments.

Occurrence of phosphate and lime muds and monazite (rare earth elements+thorium)-bearing heavy suite of minerals are also mapped and sparsely sampled by GSI for a depth of one to two metres only off the coasts of Kerala, Gujarat and Andhra Pradesh.

“At present marine exploration is mainly confined to surface mapping and sampling of seabed with virtually no coring facility to estimate mineral resources contained in the unconsolidated marine sediments. This would change under the new policy,” said another official of the mines ministry.

Sites with high concentration of nuclear minerals are to be handed over to department of atomic energy after prospecting, for further action. A threshold would be fixed for this purpose.

In order to give fillip to private sector investment in prospecting the vast mineral resources, the mines ministry has also initiated dialogue with the finance ministry to have special provisions in the tax laws that permit special allowances to cover in fructuous or abortive exploration expenses in respect of any area surrendered prior to the beginning of commercial production.

Besides, it has said that tax incentives in respect of prospecting for minerals should be on par with that available for prospecting of mineral oils.

The government is pushing for a special dispensation for mineral exploration, as it faces lacklustre investor response in the recently concluded auction of major mineral bearing mines by states. Only six blocks out of 43 identified mines (in eight states) containing major minerals such as bauxite, iron ore and limestone have been auctioned by two states so far.

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