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Business News/ News / India/  Proposal for stringent checks in works for offshore mining by foreign entities
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Proposal for stringent checks in works for offshore mining by foreign entities

The new rules being framed for operationalising offshore-area mining in the country will require prior approval of the Union government for appointing any overseas personnel and foreign equipment usage.

The new rules will supersede the Offshore Areas Mineral Concession Rules, 2006, (Photo: Mint)Premium
The new rules will supersede the Offshore Areas Mineral Concession Rules, 2006, (Photo: Mint)

New Delhi: Driven by national-security concerns, the Centre is preparing new rules that envisage stringent checks on operations of foreign entities, contractors and vessels in mining activities along the Indian coastline.

The new rules being framed for operationalising offshore-area mining in the country will require prior approval of the Union government for appointing any overseas personnel and foreign equipment usage, two people aware of the plans said.

The changes would form part of the offshore areas operating rights rules 2024 that is being finalised by the mines ministry. The new rules, which will supersede the Offshore Areas Mineral Concession Rules, 2006, will provide the terms and conditions of operating rights in the country’s territorial waters, continental shelf, exclusive economic zones and other maritime zones. The government amended the Offshore Areas Mineral (Development and Regulation) Act 2002, last year to auction mineral blocks in offshore areas for the first time to the private sector and offer both production and composite licence for all minerals excluding mineral oils, hydrocarbons and atomic minerals.

“As the areas in country’s offshore areas are sensitive and strategic in nature with presence of several defence infrastructure, it is proposed that extra checks are maintained over employment of overseas entities and personnel. Therefore, we are proposing all such mining activities will be required to be constantly monitored by an Indian entity and its local representative with daily reports being maintained for government scrutiny," one of the two people said on condition of anonymity.

Queries sent to the Union ministry of mines remained unanswered till press time.

The government has opened up mining in country’s offshore areas to the private sector to explore and produce rich base of mineral resources lying on the country’s ocean bed. It is estimated that 79 million tonnes of heavy minerals are lying untapped along the 7,517-km long coastline. The auction, therefore, will be for lime mud, construction-grade sand, heavy mineral placers, phosphorite, polymetallic ferromanganese (Fe-Mn) nodules and crusts.

According to the proposed changes in the operator ship rights for offshore mining, in case foreign domiciled entities or foreign entities or contractors, personnel, vessels or equipment are engaged or deployed for undertaking exploration operations, all applicable prior approvals shall be obtained from the relevant government authorities, including any specific approvals mandated by the central government from time to time, and any data shall be collected and work shall be carried out under the supervision and control of Indian representatives of the licencee, who shall ensure appropriate security safeguards.

Also, the licencee shall ensure that the data generated during exploration operations, including any geological data, is processed, including by foreign entities or contractors, in India and such processed and unprocessed data may be imparted to any foreign entity only with prior approval of the Administering Authority.

Moreover, exploration operations by the licencee himself or contracted companies, shall undergo and clear security inspection of the Indian Navy under the aegis of the Flag Officer Commanding-in-Chief of the concerned Naval Command and Flag Officer, Offshore Defence Advisory Group. The Naval Headquarters (Directorate of Naval Intelligence) will also scrutinise all data requirements and equipment to be put up by offshore miners, particularly from overseas entities and personnel.

A clear one month's notice must be given by the licencee to the aforesaid offices to facilitate such inspection and clearance; all vessels to be deployed for exploration operations by the licencee shall obtain prior clearance from the Directorate General of Shipping in terms of the relevant provisions of the Merchant Shipping Act, 1958 and the rules made thereunder, the first person quoted earlier said.

“Large portions of the country’s offshore areas are on guard by defence establishments and belong to sensitive and strategic category. So, mining in these areas would need extra scrutiny by the government. This happens in several countries across the globe and should not be a hindrance to bringing foreign capital in offshore exploration and mining," said an official of one of the four big global audit firms on condition of anonymity.

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ABOUT THE AUTHOR
Subhash Narayan
Subhash is the infrastructure editor at Mint and tracks the momentous developments taking place in the space that is fast changing the Indian landscape. He feels that reporting has been a passion that provides the necessary adrenaline rush and keeps you going.
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Published: 24 Mar 2024, 02:16 PM IST
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