Determining Mineral Resource Existence in Offshore Areas

Last week, the Ministry of Mines notified the Offshore Areas (Existence of Mineral Resources) Rules, 2024, providing the parameters for adequately establishing the existence of mineral resources in an offshore area.

In August of last year, certain amendments were made to the Offshore Areas Mineral (Development and Regulation) Act, 2002. The 2023 Amendment Act introduced a transparent and non-discretionary auction process as the method of allocation of operating rights in offshore areas.[1] The Ministry is in the process of framing rules for implementing the provisions of the amended Act. As part of the pre-legislative consultation policy, the Ministry released the draft Offshore Areas Mineral (Auction) Rules and the draft Offshore Areas Minerals (Existence of Mineral Resources) Rules in December 2023, seeking public comments. Earlier this year, the draft Offshore Areas Mineral Trust Rules and the draft Offshore Areas Operating Right Rules were unveiled.

Part III of Schedule I of the 2024 Rules provides the exploration norms for different types of deposits and minerals. Rule 4 mandates the completion of at least the General Exploration (G2) stage for considering a block for auction for a production lease. As to the grant of a composite licence, Rule 5 states that at least the Reconnaissance Survey (G4) stage of the exploration has to be completed or mineral potentiality of the mineral block should be identified.