The Mines Ministry is actively working on a new initiative aimed at securing essential and strategic minerals. This initiative involves the establishment of a dedicated fund to enhance exploration, acquisitions, and investment opportunities. Additionally, the plan includes setting up mineral processing facilities in foreign countries.
The proposed fund is currently in the developmental stages and is expected to mirror the structure of the National Mineral Exploration Trust (NMET). It may adopt a two-tier framework featuring contributions from industry stakeholders and financial institutions, as necessary.
Officials are exploring the potential to include private equity firms and other financial organizations as investors in this fund, with sovereign wealth funds also being considered for investment opportunities.
This fund is envisioned as a crucial component of the broader National Critical Minerals Mission. As part of this mission, there may be efforts to secure loans from multilateral financial institutions to bolster funding.
An official from the Mines Ministry stated, “We are aiming to create a fund that will facilitate investments in mining and exploration projects, as well as the establishment or enhancement of critical mineral processing operations overseas. We are currently in discussions with private equity firms, financial institutions, and Indian mining companies to encourage their participation in funding and later acquiring stakes in successful projects.”
Discussions are ongoing to address the legal frameworks surrounding this initiative. One proposal suggests that, if permissible, the fund could act as a guarantor to ensure the continuity of overseas mining ventures for Indian companies, helping to revive stalled projects and fostering confidence among private investors in their overseas investments.
Some officials within the Ministry have recommended that part of the NMET resources could be redirected to initiate this proposed fund for overseas projects. However, implementing this idea would necessitate changes to existing legal frameworks. The NMET currently has a corpus of approximately ₹6,000 crore, which is allocated to development initiatives in mining areas across the country.
The NMET operates under the Mines and Mineral (Development and Regulation) Act, featuring a two-tier structure. The governing body, chaired by the Union Mines Minister, oversees the trust, while the Executive Committee, led by the Secretary, manages operational activities. The fund accumulates resources from parties holding mining or prospecting licenses, calculated as two percent of royalties paid under the MMDR Act.
The NMET plays a pivotal role in advancing mineral exploration within India, focusing on specialized studies and projects that aim to identify, explore, extract, and refine mineral deposits, especially those that are deep-seated or concealed. This includes research into sustainable mining practices, mineral extraction, and advanced metallurgical techniques, as well as detailed efforts in locating strategic and critical minerals.
A second official stated, “Establishing a similar fund for international projects would enhance our ability to initiate new ventures and strengthen our negotiating position during government-to-government discussions.”
Previously, the Mines Ministry had encouraged several Public Sector Units (PSUs) with overseas operational experience to collaborate and bid for critical mineral projects abroad. Currently, due diligence is being conducted by one such consortium in Australia regarding lithium deposits.
India has already established 13 memorandums of understanding (MoUs) with South American countries such as Argentina, Bolivia, and Chile, as well as African nations like Mozambique and the Democratic Republic of Congo, in addition to Australia. These agreements focus on mineral exploration and partnerships, while discussions are underway with several Asian countries regarding technology transfers for processing minerals.
National Critical Mineral Mission
As part of the forthcoming National Critical Minerals Mission, the government plans to implement targeted subsidies for mining operations and the development of evacuation infrastructure.
An official remarked, “We are exploring the introduction of an incentive scheme to promote mineral recycling, which will be launched soon.” Ministry representatives have been engaging with industry stakeholders to gather insights before finalizing the details of the Mission.
Key components of the Mission will also include a Production Linked Incentive (PLI) scheme focused on mineral recycling and initiatives to establish pilot projects aimed at recovering critical minerals from overburden. Specific timelines for these initiatives will be determined in the future.
