In a bid to expedite the auction of atomic mineral resources
and reduce its dependency on the import of these minerals, the
government of India floated a draft version of the Atomic
Minerals Concession Rules (AMCR), 2016 on 11 July 2016,
inviting public comments.
The Beach Minerals Producers Association (BMPA) of India
subsequently labelled the new act as a threat to the survival
of existing miners, accusing it of being based on
unscientific assumptions.
The guidelines set under AMCR 2016 specify requirements for
the mining of atomic energy minerals – which include
beach sand minerals like ilmenite, rutile, zircon, garnet,
monazite, leucoxene and sillimanite – which are of
high economic value as they are consumed in high-tech
industries such as solar panels and hybrid car components.
India’s beach sand mineral reserves occur in an
assemblage that generally consists of ilmenite, rutile, zircon,
garnet, monazite, leucoxene and sillimanite coexisting with
each other. The major mineral in most of these deposits is
ilmenite, however the rare earths-bearing mineral monazite is
also found in large quantities.
 |
| Source: Beach Mineral Producers
Association |
Monazite is the principal ore mineral for rare earths in
India and the country has an estimated reserve of around 12m
tonnes monazite in beach sand mineral placer deposits along
coastal tracts.
The new rules under AMCR 2016 have raised concerns among
India’s private miners, who claim that the
proposed changes – mainly pertaining to the minimum
threshold limit value (TLV) of monazite set at 0.75% in the
total heavy minerals (THM) and mining concession – are
likely to restrict private mining and terminate all existing
leases that do not meet these criteria.
If implemented, BMPA believes that the beach sand mine
deposits with more than 0.75% monazite in the total heavy
minerals will be reserved for state-owned companies, in this
case Indian Rare Earths Limited (IREL) and Kerala Minerals and
Metals Limited (KMML), a Kerala government enterprise.
The BMPA argues that the minimum threshold value for
monazite is arbitrarily low and will result in around 75% of
the total deposit area being reserved for state-owned
companies.
According to AMCR 2016 rules, leases of existing operators
will be terminated if they are not government organisations in
cases where TLVs exceed guidelines.
Speaking to IM, Vaikundarajan
Subramanian, vice president of the BMPA and managing director
of VV Minerals, who is seeking the removal of the
termination clause, said: "The very concept of threshold limit
value is unscientific," but added that a 5% threshold in total
heavy minerals would be more appropriate.
 |
| Subramanian, vice president of
the BMPA, says that the concept of threshold limit value
is unscientific (Source: VV Minerals) |
Furthermore, he added that there remains a question over
jurisdiction regarding the the atomic mineral mining.
"There is uncertainty in the ministry regarding the
jurisdiction of atomic minerals, as the Department of Atomic
Energy (DAE) falls under the supervision of the prime minister
and not the Ministry of Mines, from where the draft has been
released. As such, we have appealed to the prime minister,
Narendra Modi, to reconsider the proposed guidelines,"
Subramanian told IM.
On 14 July 2016, the BMPA appealed to Modi on behalf of
private miners, asking for him to hold back the execution of
the new AMCR 2016, claiming that the regulations, if
implemented in their current form, will impact over 100,000
jobs, further affecting the country’s "Make in
India" initiative, which was launched in 2014 by the
Indian government as part of a wider set of nation-building
initiatives to transform India into a global design and
manufacturing hub.
However, Balvinder Kumar, secretary of the Ministry of
Mines, said that the ministry has already notified the industry
about the AMCR 2016 and is now working to bring out the
Exclusive Economic Zone Offshore Concession Rules.
According to the ministry, of the country’s
1,400km2 of atomic mineral-rich area, about
1,000km2 along the coast – where
minerals are available below specified thresholds –
will be offered for prospecting and production through
competitive bids. State agencies will retain rights to operate
the remaining 400km2.
The Ministry of Mines believes that the new set of
concession rules will bring greater transparency in the case of
atomic mineral leases, which will help develop domestic
resources and reduce the country’s reliance on
imports.
While the private miners await a response on their appeal,
Subramanian has specified that the present policy change will
be a "U-turn" sending the industry back to the 1950s, as
private miners were only allowed to operate after 1988, and the
existing state-owned companies have not entered into any
value-added projects for these speciality minerals.
India holds a significant share of global beach sand
mineral supply, including 35% of the world's ilmenite,
40% garnet, 71% monazite, 14% zircon and 10% of worldwide
rutile.
Reclassifying minerals
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| ( Source: BMPA) |
.Beach sands ilmenite, rutile, zircon, monazite and leucoxene
were classified as prescribed substances in the Atomic Energy
Act (therefore requiring DAE clearance for production and
processing) under the MMDR Act, 1957.
However, the BMPA noted that in January 2007, ilmenite,
rutile, zircon, monazite and leucoxene were delisted as
prescribed substances and the Ministry of Mines was also asked
to delist the minerals from their atomic minerals status.
"While the list was revised in the draft MMDR Act 2011,
categorising them under 'beach sand minerals’,
the changes were not incorporated into the MMDR Amendment Act
2015, and the minerals continue as 'atomic
minerals’," Subramanian
told IM.
Atomic minerals are generally considered a source of
energy, which can provide a substitute for coal, mineral oil
and hydro-electricity.
However, as a result of their classification in the AMCR
2016, beach sand miners are concerned about losing their
presence in the market.
An unexplored opportunity
Despite accounting for 30% of global heavy mineral
reserves, India accounts for just 4% of the
world’s total production. The industry has faced
tough competition from low cost Chinese imports, toughening
regulations and a lack of investor-friendly policies, making
it a difficult territory for further exploration.
And, with 40% of the world’s ilmenite
deposits, India currently contributes no more than 6% of
world total output, producing more than 1m tonnes
ilmenite.
The minerals are predominantly found in five states: Tamil
Nadu, Kerala, Andhra Pradesh, Odisha and Maharashtra and
there are only six companies operating in the sector,
including state-owned IREL.
Subramanian noted that it was only after the poor
performance of state-owned IREL that mining of these beach
sand minerals was opened up to the private sector, as the
company failed to add any value to the product in addition to
suffering low production tonnages.
"IREL has three plants, one in the state of Tamil Nadu,
one in Odisha and one in Kerala. Apart from Odisha, the two
other plants in Kerala and Tamil Nadu are running at less
than 30% of installed capacity," he
told IM.
The BMPA secretary believes that the new AMCR rules are
part of a government strategy to take away some of the mining
land currently being operated by private companies and give
the rights to the state-owned companies.
However, Subramanian believes that the government will
reconsider the AMCR rules taking into account the fact that
it is time to "liberalise" and allow private companies to
handle materials like monazite.
"Monazite has about 60% of rare earth minerals, which can
bring in another manufacturing revolution in India, aligning
with the prime minister’s vision of Make in
India," he said.