Mineral exploration: New India & green dreams

India is an under explored country. The journey from the National Minerals Policy 2019 up until the recently proposed amendments to the Mines and Minerals (Development & Regulation) Act 1957 is telling in so far as the government’s focus on changing this situation is concerned. The focus is essentially premised on the well-established role of the potential of the minerals sector in realizing India’s dream of self-reliance. India envisions to increase mineral mining sector’s share in GDP from 1.7 to 2.5%. The potential may be even more than that, provided the right policy environment. 

The MMDR amendment 2021 showed promise as a harbinger of game-changing reforms by allowing private agencies to undertake mineral prospecting operations. This may just be a start though. The current geo-political scenario rings multiple alarms around trade protectionism and mineral asset swaps around the world owing to projected astronomical rise in demand for critical minerals. The same, coupled with India’s domestic demands and climate commitments leaves us poised on a razor’s edge and demand a sharpening of focus. When stacked against the global exploration budget of $11.3 Bn annually, India spends a measly and conservative $170 Mn that is dwarfed by USA, Australia, Canada clocking spends in excess of $ 1 Bn. 

Sharpening the focus on exploration

One of the ways to sharpen this focus can be to narrow it to a special set of minerals that are critical not only from a supply chain perspective but also from the point of view of their indispensability to tools of energy transition like EVs. This set is a wide range of minerals including metallic and non-metallic minerals (as in Part C of Schedule I of MMDR Act) like zinc, copper, lead etc., rare earth minerals, along with other critical and strategic minerals like lithium, cobalt, nickel, cadmium, PGMs etc.. From an approach and manifestation perspective, these minerals, like any other mineral, may be found as surficial deposits or as concealed deposits. 

Both categories require detailed exploration but deep-seated minerals require state-of-the-art technologies and are therefore capital intensive. These mineral deposits manifest at a deeper level of more than 1 km (extending to even 4 kms as at Mponeng mine in South Africa) under the ground and run as underground veins and webs in no particular direction. It is on account of this peculiar manifestation that the exploration of such minerals becomes riskier thereby diminishing the chances of discovery. There is a sequential method to explore deep seated minerals but the method can be deployed by technologies and expertise that cost investment of the magnitude that governments across the globe avoid using the tax payers’ money on. 

Between 2016 – 2019, Geological Survey of India along with support from the Ministry of Mines conducted a pilot project on aero geophysics with state of art magnetic and radiometric sensors was successfully completed in 4 identified blocks.  This was supposed to be followed up by detailed electromagnetic and gravity gradiometric (targets can be identified up to 3-4 km depth) but the project did not see the light of day. 

After the successful completion of the pilot project, up to 8 other blocks OGP (Obvious Geological Potential) were to be taken but progress on the same has been non-existent. These aero geophysical surveys can be a game changer for deep seated mineral deposits as has and is often witnessed in the countries of Australia, Canada, etc. 

Incremental change with compounding effect

There is ample evidence to prove that no mineral rich country has developed its mining industry on the basis of government exploration in the last more than 30 years. The MMDR Act’s newly inserted provision on NMET fund to propel mineral exploration commensurate with India’s endowments is in clear recognition of this fact and is a step in the right direction to attract junior explorers, who have the expertise and the technology to explore deep seated minerals. The fund, however, does not take care of the policy obstacles in exploring the mineral in so far as the exploration of the mineral still needs to go through the same check points as surficial minerals. 

Even if a junior explorer or any other private player or a consortium manages the financial and technological aspect of exploring such minerals, the definition (lack of), demarcation and allocation applicable to these minerals do not factor their peculiar geology thereby maximizing the risk and minimizing the incentive for an explorer who may otherwise have the wherewithal to follow the sequential method of discovering the deposits. An incremental change by defining, demarcating and allocating such minerals through a separate mechanism may have a compounding effect. With the recent proposal to bring out some of the atomic minerals into a special schedule in MMDR Act 1957, the government already seems to be aligned with such thought process. 

While India’s mining policy has for long paid greater attention to bulk minerals, it is essential that production of minerals such as those mentioned above be incentivized and ramped up to cater to the projected exponential rise in demand in the coming years. As per a financial services firm, current dependence on import of these critical minerals amounts to 14% of India’s imports comprising $8.5 Bn in deep seated minerals and another $78 Bn in precious metals, which, by any standards would peg it as a major forex guzzler. This leaves us vulnerable to global supply chain shocks, negatively impacts our goals of an Atmanirbhar Bharat and effects our competitiveness in the international market. A specialized policy framework deep seated minerals will help explore a whole range of minerals critical to India’s domestic growth and green dreams.