Offshore Mineral Blocks for Auction

  • March 2, 2024
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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Offshore Mineral Blocks for Auction

Subject: Geography

Section: Eco Geography

  1. Shortlisted Blocks:
    • The Mines Ministry has shortlisted around 10 offshore mineral blocks for potential auction.
  2. Location:
    • Blocks are located on both the east coast and west coast of India.
  3. Minerals:
    • Expected minerals include:
      • Construction sand
      • Lime mud
      • Others
  1. Number of Identified Blocks:
    • Ministry has identified 35 offshore mineral blocks so far.
    • Potential auctions would mark the first offshore mining activities in India.
  2. Exclusive Economic Zone (EEZ):
    • Some blocks are in the Exclusive Economic Zone of India, beyond the territorial waters (12 nautical miles).
    • Target minerals: Lime mud and polymetallic nodules.
  3. Consultations:
    • Inter-ministerial discussions underway with Ministries like Defence for necessary No-Objection Certificates (NOCs).
    • Aim to avoid any overlapping with existing projects.
  4. Timeline:
    • Auctions likely to occur by June-July 2024.
  5. Mineral Usage:
    • Lime mud primarily imported, used in:
      • Steel
      • Paint
      • Pharma
      • Glass industries
    • Marine sand deposits (used in construction) reported off the coast of Kerala.
  6. Auction Rules:
    • Discussion on rules:
      • Auction for production in-lease can be made at G3 level of exploration for silica sand and lime mud.
  1. Offshore Mining Stages:
    • Four stages of exploration:
      • Reconnaissance (G4)
      • Preliminary exploration (G3)
      • General exploration (G2)
      • Detailed exploration (G1)
  1. Deep-sea Mining:
    • Offshore mining or deep-sea mining involves retrieving mineral deposits from ocean depths below 200 metres.
    • Process:
      • Submersible crafts with suction pipes creep across the seabed, stirring up metallic objects.
      • Poly-metallic nodules sorted, unwanted sediment flushed back into the sea.
  1. Demand:
    • Growing demand for metals like those in nodules for:
      • Wind turbines
      • Solar panels
      • Batteries
      • Smartphones
    • Essential for clean-energy technologies.
  2. Standard Operating Procedures:
    • Centre is developing SOPs for private sector bidders winning exploration rights.

Offshore mineral auctions mark a significant step in India’s mining sector, potentially unlocking valuable resources and catering to the demand for essential minerals in various industries.

Offshore Areas Mineral (Development and Regulation) Amendment Bill, 2023: Salient Features

Introduction of Auction Regime

  • Purpose: Major reform in allocating operating rights in offshore areas.
  • Method: Operating rights granted through auction via competitive bidding.

Types of Operating Rights

  1. Production Lease:
    • Granting to private sector through auction.
    • Duration fixed at 50 years, aligning with MMDR Act.
    • Renewal provision removed.
  2. Composite License:
    • Two-stage operating right for exploration and production.
    • Private sector granted through auction.

Operating Rights for PSUs

  • Mineral-bearing areas reserved by Central Government.
  • PSUs exclusively granted operating rights for atomic minerals.

Area Acquisition Limit

  • Maximum Area:
    • Restricted to 45 minutes latitude by 45 minutes longitude.
    • Applies to any mineral or prescribed group of associated minerals.

Non-Lapsable Offshore Areas Mineral Trust

  • Purpose:
    • Ensure funds for:
      • Mitigation of adverse impacts.
      • Disaster relief.
      • Interest and benefits for affected parties.
    • Funding:
      • Additional levy on mineral production, up to one third of royalty.
      • Rate to be prescribed by Central Government.
    • Management:
      • Trust to maintain a fund under the Public Account of India.

Ease of Business Measures

  • Transfer of Licenses:
    • Provision for easy transfer of composite license or production lease.

Timelines for Production

  • Commencement:
    • Introduction of timelines for starting production and dispatch.
    • Ensures timely utilization of leases.

Revenue Allocation

  • Royalty and Premiums:
    • Revenues from offshore mineral production accrue to Government of India.

Significance of Offshore Mineral Resources in India

  • Resource Potential:
    • Vast mineral resources within Exclusive Economic Zone (EEZ).
  • GSI Findings:
    • Lime mud, construction-grade sand, heavy mineral placers, phosphorite, ferromanganese nodules and crusts.
  • Economic Growth:
    • Utilization essential for India’s high-growth economy.
  • Public-Private Partnership:
    • Encouragement of public-private partnerships.
    • Private sector brings expertise and technology for exploration.

Conclusion

The Offshore Areas Mineral (Development and Regulation) Amendment Bill, 2023 introduces crucial reforms in India’s offshore mining sector. By adopting an auction regime, granting specific rights to PSUs for atomic minerals, setting area acquisition limits, and establishing a non-lapsable trust, the Bill aims to promote transparency, responsible mining, and economic growth.

It aligns with India’s vision of harnessing its maritime resources for sustainable development while ensuring benefit for all stakeholders.

Understanding the International Seabed

  • The international seabed, also known as the Area, refers to the seabed and ocean floor beyond national jurisdiction.
  • It covers about 54% of the world’s oceans.
  • Recognized under the United Nations Convention on the Law of the Sea (UNCLOS) as the “common heritage of mankind,“ it is to be managed for the benefit of all nations.

The Role of International Seabed Authority (ISA)

  • Establishment: ISA is an autonomous international organization established under UNCLOS.
  • Mandate: It regulates and manages all mineral-related activities in the international seabed.
  • Functions:
    • Grants licenses and regulates exploration and exploitation activities.
    • Ensures activities protect the marine environment.
    • Promotes equitable and efficient resource utilization.

Deep Sea Mining:

Definition: Involves extracting mineral deposits and metals from the ocean floor.

  • Types:
    1. Mining polymetallic nodules.
    2. Extracting massive seafloor sulphide deposits.
    3. Stripping cobalt crusts from rocks.
  • Materials: These areas contain minerals vital for technologies such as batteries, cellphones, and renewable energy.

Current Regulations on Deep Sea Mining

  • Governed by the United Nations Convention on the Law of the Seas (UNCLOS).
  • High Seas: Areas beyond 200 nautical miles from any nation’s coast.
  • Common Heritage: The seabed and its resources are considered humanity’s shared wealth.
  • Management: Must protect global interests, support research, and safeguard marine environments.

Challenges of Offshore Mining

  • Environmental Impact
  • Deep-Sea Ecosystem
  • Technological Challenges
  • Regulatory Issues
  • Resource Conflicts
  • Economic Viability
  • Social Impact
  • Waste Management
  • Accidents and Spills
  • Lack of Coordination
Geography Offshore Mineral Blocks for Auction