Background

The Offshore Areas Mineral (Development and Regulation) Amendment Bill, 2023 regulates all aspects of offshore mining  or mining in maritime zones.

Maritime zones are areas of oceans or seas which fall under national / international jurisdiction. They are divided into (i) internal waters (ii) territorial seas (iii) contagious zones (iv) Exclusive Economic Zones (EEZ) (v) continental shelf (vi) high seas (vii) deep ocean floor. Such division is usually made based on political, national / international jurisdiction.

Offshore mining activities include undertaking preliminary survey to locate existence of mineral resources in the sea or ocean, exploring the exact location of mineral / mineral deposits and thereafter extraction of such mineral resources.

Latest 

In August 2023, the Offshore Areas Mineral (Development and Regulation) Amendment Bill, 2023 was passed by both houses of the Parliament. The objective is to amend / modify the existing Offshore Areas Mineral (Development and Regulation) Act 2002 (“Act 2002”) and make it comprehensive and one stop legislation.

Highlights of the Amendment Bill:

1. Hitherto, separate licenses were issued for reconnaissance, exploration, and extraction. The Bill introduces a composite license for exploration and production. The license shall be issued with a precondition that the exploration shall be completed within 3 years extendable by another 2 years upon an application made by the licensee.
2. Subject to the area explored by the licensee, licensee will be granted for production lease of the explored area. The Bill proposes the maximum area for undertaking exploration and production can take place. The amendment further prescribes that production lease under composite license shall be valid for a period of 50 years.
3. The Act, 2002 provides for administrative allocation of mining areas. The Bill makes it mandatory to for allocation to be done through competitive bidding for a production lease and a composite license to private entities.
4. The Bill proposes the administering authority to grant composite license to the government or government company subject to satisfaction of certain pre-conditions such as the government company entering a joint venture with at least 74% of the pad up capital and being selected through a competitive bidding process. The Bill further states that exploration and production of certain types of minerals like atomic minerals such as uranium, thorium and other rare metals / minerals will be reserved exclusively for the government / government companies.
5. The Bill proposes the setting up of offshore areas mineral Trust. Allottees / concession holders will be required to contribute a sum of money to the Trust. The funds of the Trust shall be used for further exploration and research development  and relief in cases of disaster(s).
6. The Bill proposes to increase the fines for offences such as unauthorized offshore mining to fine of upto Rs. 10 lakhs, imprisonment of upto 5 years or both.

The way ahead

Despite the existence of an Act, there has been no offshore mining activity for long now. The Bill aims to harness the maritime resources while maintain balance with the sensitive ecology and ensure sustainability. The objective of the Bill is to promote private participation while ensuring the final control rests with the government and promote transparency and ease of doing business.

For full text of the Bill:

https://prsindia.org/files/bills_acts/bills_parliament/2023/Offshore_Areas_Mineral_(Development_and_Regulation)_Amendment_Act,_2023.pdf