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Reserved for PSUs: Govt abandons plan to open offshore mining to private players

Surya Sarathi Ray
mining, mining policy, mining minerals, mining regulations, minerals, exploration of minerals, offshore mining

The government has abandoned a plan to allocate offshore mining leases to the private sector through the auction route. Instead, it will reserve them for the public sector.

The plan to amend the Offshore Areas Mineral (Development and Regulation) Act, 2002, to pave way for allocation of offshore leases through auction was attempted through a 2017 Bill.

The objective of the Bill was "to put in place a mechanism for grant of composite licence, exploration licence-cum-production lease, or production lease, on the basis of auction through competitive bidding for the sake of introducing a transparent and non-discriminatory regime for grant of operating rights in the offshore areas".

However, there has been no progress since then. The OAMDR Act, 2002, governs all offshore minerals barring crude oil and other hydrocarbons. The OAMDR Act, 2002 does not provide for auctioning of the minerals, unlike the Mines and Minerals (Development and Regulation) (Amendment) Act, 2015, which makes auction mandatory for all non-coal minerals in onshore areas.

The auctioning provision under the MMDR (Amendment) Act also could not be extended for offshore minerals. However, Section 29 of the OAMDR Act, 2002, empowers the Centre to make any "enactment so extended shall have effect as if the offshore area or the part thereof, as the case maybe, is a part of the territory of India". The UPA government had in 2010 allocated 62 exploration mineral licences in the offshore area, but these were to be annulled subsequently following a raging controversy over the process of allocation.

India is bound by the Indian Ocean on the south, the Arabian Sea on the south-west and the Bay of Bengal on the south-east and has a more than 7,500-km-long coastline and the territorial waters cover more than 0.15 million sq km. Seabed resources of these areas and the exclusive economic zone (EEZ) covering about 1.87 million sq km have also come to light in recent years. If legal continent shelf is taken into account, total offshore area would become about 3.09 million sq km.

The Marine and Coastal Survey Division of GSI and the National Institute of Oceanography have embarked on carrying out preliminary offshore exploration for economic minerals in the offshore areas, mainly for economic heavy minerals, construction sand, phosphatic nodules, lime mud and polymetallic nodules.