INDIA Trends and Developments Contributed by: Anuja Tiwari, Mallika Anand, Aditya Pandey and Aman Raj, AZB & Partners
Mineral (Development and Regulation) Act, 2002 (OAMDR Act) was introduced to regulate the development of mineral resources in Indian ter - ritorial waters and other maritime zones of India. India’s exclusive economic zone spans over 2 million square kilometres and is estimated to hold significant mineral reserves. Although the OAMDR Act was introduced in 2003, nothing noteworthy took place in the off - shore mining sector until 2023. Since then, the government has been proactive in streamlining the regulatory framework to, inter alia, allow private participation and extraction of miner - als such as construction-grade silica sand, lime mud, precious metals and rare earth elements that lie thousands of metres below the seabed. These minerals play a crucial role in the renew - able energy, EV and battery technology sectors. The OAMDR Act was amended to introduce transparent and non-discretionary auction pro - cesses for allocating operating rights in offshore areas and to enable private participation in off - shore mining operations. Existence of Mineral Resources Rules, 2024 The Ministry of Mines has recently introduced certain rules to expedite offshore mining in India. The Existence of Mineral Resources Rules lay down the procedure for identifying areas for auctions of production leases and composite leases. The process includes a survey of such areas and the preparation of a report in the pre - scribed form before notifying an area for auction. The rules define stages of exploration, feasibil - ity studies, economic viability assessments and classification of mineral resources and reserves. A minimum of general exploration (G2) is required for an area to be considered for auction for a production lease, while a reconnaissance survey (G4) is necessary for an area to be considered
for auction for a composite licence. Comprehen - sive environment assessments have been made mandatory for all offshore mining projects. Offshore Areas Mineral (Auction) Rules, 2024 These rules were introduced to provide the procedure for conducting competitive bidding through electronic auctions for the grant of pro - duction leases and composite licences. Auction processes are to be initiated by the administra - tive authority for specific mining sites or areas. The grant of any of the following operating rights in an offshore area is subject to satisfaction of the conditions contained in the Existence of Min - eral Resources Rules: • the right to conduct preliminary reconnais - sance operations for minerals; • the right to explore mineral deposits; or • the right to extract mineral deposits for pro - cessing or dispatch. The objective is to promote fair competition, attract private sector participation and create a level playing field for interested entities. Offshore Areas Mineral Trust Rules, 2024 The Offshore Areas Mineral Trust has been established under these rules to regulate the management and utilisation of funds. As part of its objectives, the trust is required to utilise funds towards sustainable development of affected areas and the welfare of local communities. The Ministry of Mines has also prepared draft Offshore Areas Mineral Conservation and Devel - opment Rules to promote sustainable mining practices. The rules set guidelines for the con - servation of marine ecosystems, the rehabilita - tion of mined areas and the development of local communities. They require comprehensive envi - ronmental impact assessments and adherence
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