Centre Tables Bill To Open Up Lithium Mining To Private Sector

The Centre on Wednesday, tabled a Bill in the Lok Sabha that sought to allow private players into mining of lithium and other five critical minerals.

The Mines and Minerals (Development and Regulation) Amendment Bill, 2023 which has proposed amendments to the Mines and Minerals (Development and Regulation) (MMDR) Act, 1957, was introduced in the Lok Sabha by Parliamentary Affairs Minister Pralhad Joshi on 26 July.

The amendment proposes to remove six minerals including Lithium from the list of atomic minerals.

Atomic Minerals refer to such minerals, which are or may be used for the production or use of atomic energy or research into connected matters. A total of 12 such minerals are specified in Part-B of the First Schedule to the MMDR Act, 1957 and as such, their mining and exploration is reserved for government entities.

The bill proposes to omit six minerals and their ores — lithium, beryllium, titanium, niobium, tantalum and zirconium — from the list of atomic minerals.

Upon removal of these minerals from the said list, exploration and mining of these minerals will be opened up for the private sector as well. As a result, exploration and mining of these minerals is expected to increase significantly in the country.

Notably, all the six minerals are part of the 'Critical Mineral List' released by the Centre on 28 June. The list of 30 critical minerals was identified in a report titled "Report of the Committee on Identification of Critical Minerals" prepared by an expert team constituted by the Ministry of Mines last November.

These minerals have various applications in space industry, electronics, communications, energy sector, electric batteries. According to the Bill, these minerals are also critical in net-zero emission commitment of India.

Lithium Criticality

Also referred to as “white gold”, lithium is a non-ferrous metal and is used in rechargeable batteries, which power not only laptops and mobile phones but also electric vehicles (EVs) — a crucial part of the world’s plan to tackle climate change.

Lithium-ion batteries offer a longer life cycle as compared to traditional lead-acid batteries. However, the main reason for their high adoption in EVs is their high energy density. High energy density allows lithium-ion batteries to store more energy in less weight/volume, which is an ideal requirement for e-mobility applications.

In a major achievement, the Ministry of Mines in February 2023 had announced that the Geological Survey of India (GSI) had established “lithium inferred resources” — calculated on the basis of physical and chemical study of the surface and samples — in Salal-Hamima area of Reasi District of Jammu and Kashmir.

The resources to the tune of 5.9 million tonnes (MT) have been established as part of the “Reasi Sersandu-Kherikot-Rahotkot-Darabi” mineral block, where prospecting has been ongoing since 2021-22. Further exploration activities for searching additional lithium sources is already underway in the Salal Hamima region in Jammu.

The Centre has asked the Jammu and Kashmir administration to start the auction of Lithium reserves found in Reasi, by December this year.

The Ministry is currently in the process of determining the reserve price, also known as the average selling price, for these reserves. Further, the Jammu and Kashmir administration is also in the process of appointing a transaction advisor. 

The transaction advisor will offer suggestions to the government on the procedure and method of auction besides preparing the model bid document.