The Indian government is initiating a significant step towards harnessing offshore mineral resources with the establishment of the Offshore Areas Mineral Trust (OAMT) Fund. This fund will be financed by charging 10% of the total royalty paid on the sales of minerals produced in offshore areas, representing a strategic move to promote mining activities in these regions. The proposal is expected to be incorporated into new rules for offshore minerals after extensive inter-ministerial and stakeholder consultations.
The Ministry of Mines has identified approximately 35 offshore mineral blocks along both the East and West coasts, with plans to auction around 10 of these blocks soon. The OAMT Fund, modeled after the successful National Mineral Exploration Trust (NMET), aims to support activities benefiting project-affected persons and promote research, development, and exploration activities specific to offshore minerals.
Offshore mining, or deep-sea mining, involves retrieving mineral deposits from the ocean bed lying below 200 meters. These mineral resources are crucial for various industries, including renewable energy, electronics, and construction. The government seeks to exploit untapped resources along India’s vast coastline, including lime mud, construction-grade sand, heavy mineral placers, phosphorite, and polymetallic Ferromanganese nodules and crusts.
The decision to establish the OAMT Fund underscores the government’s commitment to harnessing offshore mineral resources to serve India’s strategic interests. By incentivizing private sector participation through auctions and providing a framework for exploration and production licenses, the government aims to bolster its hold in territorial waters and mitigate threats of intrusion by neighboring countries.
Amit Kapur, Joint Managing Partner at JSA Advocates, lauded the government’s initiative, noting that the Trust Fund would create a corpus of funds from profits generated by private miners, facilitating exploration and development efforts. This move aligns with the constitutional scheme and reflects a progressive policy stance, emphasizing the importance of responsible resource utilization and sustainable development.
R.K. Sharma, Secretary-General of the Federation of Indian Mineral Industries (FIMI), highlighted the need for higher duties on mining and production to incentivize private miners. He suggested offering mineral blocks to junior mining companies on nomination to make exploration and production economically viable, thereby enhancing industry participation.
The Offshore Areas Mineral (Development and Regulation) Act, 2002, amended in 2023, provides the legal framework for the development and regulation of mineral resources in offshore areas. The amendments aim to attract private sector explorers and miners, introducing new production and composite licenses to streamline operations and promote investment in offshore mining projects.
Overall, the establishment of the OAMT Fund represents a pivotal step towards unlocking the vast potential of offshore mineral resources. By creating a conducive environment for private sector participation and investment, the government aims to enhance India’s self-reliance in critical minerals, foster economic growth, and bolster its strategic interests in maritime territories.