Context: The government has approved amendments to the Mines and Minerals (Development and Regulation) Act allowing commercial mining of lithium and a few other minerals. Proposed Amendments:
- Lifting ban: The amendment will lift the ban on commercial mining of six critical minerals which are Lithium, beryllium, titanium, niobium, tantalum and zirconium.
- Critical minerals: The government declared 30 minerals as critical for the country, including these six minerals.
- Monetising assets: The proposed amendment will allow the Central government to auction these minerals while the royalty will go to states.
- Procurement of critical minerals: Government is focused on procuring critical minerals, especially lithium, which is useful for batteries, especially for electric vehicles.
- Mining by private entities: Currently, commercial mining of these critical minerals by private companies is prohibited. Only government agencies were allowed in exploration and mining operations.
- Energy Transition: So far, most of the exploration in the country has been focussed on bulk commodities like limestone, coal and iron ore. With new requirements in transition, there is a growing demand for critical minerals, prompting the government to focus on the exploration of deep-seated and critical minerals.
- Reducing import dependency: India is seeking to become a manufacturing hub and reduce import dependence of several minerals used in manufacturing.
- Currently, India is dependent on China and other countries to meet its requirement of critical minerals including Rare Earth Elements (REE), which are the building blocks of modern-day technologies.
- Critical minerals are those minerals that are at risk of supply shortage, which may have a larger impact on the economy compared to that of other raw materials.