OFFSHORE AREAS MINERAL ACT (Syllabus: GS Paper 3 - Infrastructure)

Context: India’s mining sector is in for a sea change with Parliament passing the Offshore Areas Mineral (Development and Regulation) Amendment Bill 2023 to begin a serious hunt for mineral treasures buried under water.

• The Bill amends the Offshore Areas Mineral (Development and Regulation) Act, 2002.   The Act regulates mining in maritime zones of India.  

Highlights of the bill

• The Act categorises offshore mining-related activities into: (i) reconnaissance, which involves a preliminary survey to locate mineral resources, (ii) exploration, which includes exploring, proving, or locating mineral deposits, and (iii) production, the commercial activity of the extraction of minerals.
• The Act provides for the following types of concessions: (i) a reconnaissance permit for reconnaissance, (ii) an exploration licence for exploration, and (iii) a production lease for undertaking mining. 
• Under the Act, a production lease is granted for a period of up to 30 years.  It may be further renewed for up to 20 years.  
• The Bill instead provides that a production lease, as well as a production lease under a composite licence, will be valid for 50 years.
• The Act provides for the grant of concessions through administrative allocation.  
• The Bill mandates competitive bidding for a production lease and a composite license to private entities.
• The Act allows the government to reserve offshore areas that are not held under any operating right. 
• The Bill allows the administering authority to grant a composite licence or production lease to the government or a government company.
• The Bill adds that in case of atomic minerals, exploration, production, and composite licenses will be granted only to the government or government companies. 
• Under the Act, the size of one block for offshore mining is five minutes latitude by five minutes longitude.  
• The Bill reduces this to one minute latitude by one minute longitude.

• The Bill sets up the Offshore Areas Mineral Trust. 
• The funds will be used for specified purposes including: (i) exploration in offshore areas, (ii) research and studies about the mitigation of adverse effects of offshore mining on the ecology, and (iii) relief upon the occurrence of a disaster.
• The Bill increases fines for various offences.  
• For instance, under the Act, conducting any activity without a permit or licence is punishable with imprisonment of up to five years, a fine of up to Rs 50,000, or both.  As per the Bill, the fine for this offence will be between five lakh rupees and Rs 10 lakh.