Govt Announces Reimbursement for Mineral Exploration in India

To encourage mineral exploration and mitigate the associated costs, the Ministry of Mines launched the Scheme for Partial Reimbursement of Exploration Expenses for Holders of Exploration Licences (EL).

Key Features of the Scheme:

1. The scheme offers partial reimbursement of exploration expenses to EL holders, aiming to involve the private sector in mineral exploration.
2. It provides a 50% reimbursement on expenses incurred during the exploration of critical minerals, with a maximum cap of Rs 20 crore.

3. If the EL holder hands over a G2 (general exploration) block for auction within three years of the exploration licence execution and it is successfully auctioned, the maximum cap can be increased to Rs 24 crore.
4. The incentives for selected licensees will be provided from the Rs 5,000 crore National Mineral Exploration Trust (NMET) fund.
5. The EL holder must repay the amount received from NMET within ten years, in equal annual instalments, starting from mineral production and auction premium share receipt from any mining leases auctioned based on their exploration.
6. If the EL holder receives a lump sum payment instead of annual premiums, they must repay the full amount to NMET within one month of receiving the lump sum payment.
7. There is no limit on the number of applications or the scheme’s outlay.
8. The scheme is part of the National Mineral Exploration Policy (NMEP) of 2016, which aims to promote private sector participation in mineral exploration.
9. The exploration of critical and deep-seated minerals became possible after the 2023 amendment to the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), which introduced a new mineral concession for exploring 29 critical and deep-seated minerals listed in the Act’s Seventh Schedule.
10. EL holders granted licenses through auction after the scheme’s introduction can optionally participate in the scheme.
11. To avail the benefits, holders must submit an exploration expense reimbursement proposal within six months of receiving their EL.
12. Decisions on reimbursement under the scheme will not impact the obligations of EL holders as per the terms of their EL set by the State Government at the time of auction.
13. The ministry has divided the exploration exercise into six stages, with each stage eligible for 50% reimbursement, subject to a maximum cap of Rs 20 crore.
14. Specific maximum outlays have been outlined for each stage in the scheme, ranging from Rs 1.50 crore for geological mapping and sampling to Rs 10 crore for exploratory drilling.

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