In a significant policy shift, the mines ministry said it will directly sanction exploration projects to notified private agencies for critical and deep-seated minerals.

The ministry has also allowed the exploration agencies to bid for the auction of mineral blocks explored by them — which was not allowed earlier.

This new scheme will help bring new technologies in the field of exploration.

The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), was amended through the MMDR Amendment Act, 2021, w.e.f. March 28, 2021 which empowers the central government to notify entities, including private entities, that may undertake prospecting operations.

Analysts pointed out that the Supreme Court answering the presidential reference had categorically stated that auction was not the only method for awarding natural resources.

“Can auction as a method of disposal of natural resources be declared a constitutional mandate under Article 14 of the Constitution of India? We would unhesitatingly answer it in the negative since any other answer would be completely contrary to the scheme of Article 14,” the Supreme Court observed in 2012. The reference was sought after the apex court verdict on 2G spectrum.

It observed that “auctions may be the best way of maximising revenue but revenue maximisation may not always be the best way to subserve public good. Common good is the sole guiding factor under Article 39 (b) for distribution of natural resources”.