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Home / IAS Preparation / National Mineral Policy

National Mineral Policy - Background, Objectives, Major Features, Impact, Benefits & Significance

Last Updated on Sep 15, 2023
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The National Mineral Policy promotes extensive exploration focusing on deep-sea resources to improve mining's GDP contribution. The National Mineral Policy 2019 replaces the previous National Mineral Policy, which was adopted in 2008. The new programme seeks to reduce the trade imbalance in the mining industry by half over seven years. It aims to increase primary mineral production by 200 percent. 

National Mineral Policy is one of the most important topics for the UPSC IAS exam. It covers a significant part of the Government Schemes section in the General Studies Paper-2 Syllabus and current events of national importance in General Studies Paper -1 of the UPSC Prelims Syllabus. 

In this article on the National Mineral Policy, we shall discuss its background, key provisions, features, benefits, objectives, impacts, challenges, and other significant details. 

Know more about the Physical characteristics of minerals!

What is National Mineral Policy?

The National Mineral Policy (NMP) is a policy document of the Government of India. It outlines the government's vision for the development of the mineral sector. The NMP 2019 is the current policy. It aims to increase the contribution of the mineral sector to the country's GDP. It promotes sustainable mining practices and ensures equitable sharing of benefits from mining.

Background on National Mineral Policy

The first National Mineral Policy (NMP) was enunciated by the Central Government in 1993. It was a major departure from the previous policy, which was focused on state control of the mineral sector. The 1993 NMP opened up the mineral sector to private investment. It promoted the development of a market-based approach to mining.

The NMP 2008 was a revision of the 1993 policy. It reiterated the government's commitment to a market-based approach to mining. It set out many specific goals for the development of the mineral sector. 

The NMP 2019 is the latest version of the policy. It builds on the goals and objectives of the previous policies. It also introduces some new elements.

National Mineral Policy, 2019 – Approved by Cabinet

Here is a brief overview of the National Mineral Policy (NMP) 2019, approved by the Cabinet in February 2019:

The NMP 2019 aims to increase the contribution of the mineral sector to the country's GDP. It promotes sustainable mining practices and ensures equitable sharing of benefits from mining.

The policy also seeks to attract private investment in the mineral sector. It aims to make mineral-based materials available to domestic users at reasonable prices.

To protect the welfare of both the present and future generations, the 2019 Policy also incorporates the idea of intergenerational equity. It also suggests establishing an interministerial body to formalise the procedure for ensuring the mining sector’s sustainable growth.

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Objectives of National Mineral Policy
  • Engaging in socially, economically sustainable, and environmentally healthy mining.
  • To encourage better regulation, enforcement, and transparency.
  • The National Mineral Policy 2019 aims to develop a more sensible, useful, and effective policy.
  • To enhance regulation, enforce sustainable mining practices, and increase transparency, the National Mineral Policy 2019 aims to have a more meaningful, effective, and implementable policy.
  • Maximise the sectoral contribution of the Indian economy.
  • Support for the Make in India programme.
  • Exploratory attempts will rise if private sector services are used.

Learn about the Environmental Impact Assessment for UPSC here!

Main Features of National Mineral Policy

Here are the main features of the National Mineral Policy (NMP) 2019:

  • Promotion of large-scale exploration and mining: The NMP 2019 promotes large-scale exploration and mining through the auctioning of mineral blocks. This is expected to attract private investment. It will help boost the production of minerals in India.
  • Emphasis on deep-sea resources: The NMP 2019 emphasizes the development of deep-sea resources. These are estimated to be worth trillions of dollars. This is a new feature of the policy, and it is expected to help India achieve self-reliance in minerals.
  • Granting of mining activity industrial status: The NMP 2019 grants mining activity industrial status. This will make it easier for companies to get loans and other financial help. This is expected to attract more investment in the mineral sector.
  • Alignment of India's tax, levy, and royalty rates with global benchmarks: The NMP 2019 aligns India's tax, levy, and royalty rates with global benchmarks. This is expected to make the country more competitive in the global mining market.
  • Creation of dedicated mineral corridors: The NMP 2019 creates dedicated mineral corridors to ease the transportation of minerals. This is expected to reduce the environmental impact of mining.
  • Online public portal for tracking clearances: The NMP 2019 establishes an online public portal for tracking clearances. This will make the mining approval process more transparent and efficient.
  • Maintenance of a database of mineral resources and tenements: The NMP 2019 maintains a database of mineral resources and tenements. This will help to improve the efficiency of the mining sector.
  • Use of coastal waterways and inland shipping for evacuation and transportation of minerals: The NMP 2019 encourages the use of coastal waterways and inland shipping for the evacuation and transportation of minerals. This will reduce the environmental impact of mining.

Learn about Hydrocarbon Exploration and Licensing Policy here!

Impact of National Mineral Policy

Here are the key points on the impact of the National Mineral Policy (NMP) 2019:

  • The NMP 2019 has led to an increase in the number of mineral exploration permits and mining leases granted. This is expected to boost the production of minerals in India.
  • The NMP 2019 has attracted private investment in the mineral sector. This is due to the policy's focus on promoting large-scale exploration and mining. The policy is also in alignment with India's tax, levy, and royalty rates with global benchmarks.
  • The NMP 2019 is expected to create jobs in the mining sector. This is due to the increase in exploration and production activities.
  • The NMP 2019 is expected to help India achieve self-reliance in minerals. This is due to the policy's focus on the development of deep-sea resources.
  • The NMP 2019 has some provisions that are aimed at reducing the environmental impact of mining. For example, the policy requires miners to take measures to protect the environment and the rights of local communities.

Learn about the Mineral Belts of India here!

Benefits of National Mineral Policy
  • The reusability of metals promotes the preservation of natural resources and positively affects economic growth, energy efficiency, and environmental protection.
  • Long-term mining industry development will result from it.
  • It guarantees that the Pradhan Mantri Khanij Kshetra Kalyan Yojana’s goal of equitable and inclusive development would benefit the program’s target populations and geographical areas (“PMKKKY”).
  • Regulations will be more effective because of the New National Mineral Policy.
  • While considering the concerns of project participants, particularly those living in indigenous communities, it will help the mining industry achieve long-term sustainability.

Know more about the Marine Mineral Resources!

Significance Of National Mineral Policy
  • A long-term mineral export-import policy is recommended by NMP 2019 as a motivator for large-scale commercial mining operations.
  • An online public portal that can send suggestions to a higher level during clearance delays has been built to facilitate the state's involvement in mining development.
  • The National Mineral Policy 2019 recommends granting mining activity industrial status to enhance private-sector mining finance and private-sector acquisitions of mineral assets in other nations. The mining industry will benefit from the move.
  • The strategy also emphasises aligning India’s tax, levy, and royalty rates with worldwide benchmarks to attract more private investment.
  • The 2019 National Mineral Policy attempts to entice private investment through incentives while maintaining a database of mineral resources and tenements undermining tenement systems.
  • Ensuring environmental sustainability while raising performance standards is a significant development and policy concern for the mining industry.
  • A public online portal has been established, with the capability of creating triggers at a higher level in the case of state clearance delays.
  • To institutionalise the system to ensure the long-term development of mining, it also recommends the establishment of an inter-ministerial council.

Know more about the Rare Earth Minerals!

Way Forward
  • Mineral Corridors need to be established.
  • Fast-track courts dedicated to the minerals sector need to be established.
  • Various ministries, like Ministries of Highways, Railways, and Transportation, need to work on a collaborative basis.
  • Subsidy related to domestic mining prices must be provided to stop the import of minerals that can be extracted in India.
  • The Mining Sector can greatly help to boost the prospects of the $ 5 Trillion Indian Economy by 2024. Thus, continuous efforts need to be put in to increase the productivity of this sector.

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National Mineral Policy FAQs

The 2019 National Mineral Policy aims to tighten laws that might help the mining industry grow more sustainably. With an emphasis on the occupants of tribal villages, it also aims to implement mining restrictions in a fair and transparent manner that helps those who are affected by them.

The National Mineral Policy was revised in the year 2019.

The first Mineral Policy of India was declared in 1993.

To codify the current laws and regulations ensuring the security of mine workers, the Mines Act of 1952 was developed. The entire country of India is covered by this Act, which was approved by Parliament on December 31, 1953.

The Government of India in 1973 natioanlized the Mining Industry of India.

The need of a Mineral Policy is to effectively manage the Mineral Industry of a country as per the prescribed rules and regulations.
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