New Fund to Boost Critical Minerals Exploration

January 6, 2025

The Indian Mines Ministry plans to establish a new fund to enhance exploration and investment in critical and strategic minerals. This initiative aligns with the National Critical Minerals Mission and aims to secure resources essential for various industries. The fund is expected to adopt a structure similar to the National Mineral Exploration Trust (NMET), featuring a two-tier framework for better management and oversight.

Fund Structure and Contributions

The proposed fund will likely include contributions from the mining industry and financial institutions. Officials are considering the involvement of private equity firms and sovereign wealth funds. The aim is to create a robust financial base for supporting overseas mining projects and mineral processing facilities.

Objectives of the Fund

The primary objective of the fund is to facilitate investments in mining and exploration activities. It may also assist in establishing processing facilities abroad. By acting as a guarantor for overseas projects, the fund can help revive stalled initiatives and instil confidence in private investors.

Legal Framework and NMET Influence

The fund’s establishment may require changes to existing legal frameworks. The NMET operates under the Mines and Mineral (Development and Regulation) Act, which outlines its governance and funding mechanisms. The proposed fund could draw from the ₹6,000 crore corpus of the NMET, but this would necessitate legal adjustments.

Exploration and Partnerships

India has signed 13 Memoranda of About (MoUs) with countries in South America and Africa for mineral exploration and partnerships. Ongoing due diligence is being conducted for lithium blocks in Australia. The Mines Ministry encourages public sector undertakings with overseas experience to collaborate on critical mineral projects.

National Critical Minerals Mission Components

The National Critical Minerals Mission will offer targeted subsidies for mining activities and infrastructure development. An incentive scheme for mineral recycling is also under consideration. The Ministry is engaging with industry stakeholders to gather feedback and refine the Mission’s details.

NMET stands for National Mineral Exploration Trust.
The fund may involve sovereign wealth funds as investors.
India has MoUs with countries like Argentina and Mozambique.
The fund aims to support overseas mineral processing facilities.
The NMET corpus is approximately ₹6,000 crore.

Future Developments and Industry Engagement

The Mines Ministry is actively consulting with industry participants to finalise the details of the National Critical Minerals Mission. The timeline for implementing various components, including pilot projects for mineral recovery, will be established in due course.

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