India Launches First Auction of Offshore Mineral Blocks
Why focus: GS1/GS3 Geography — sets up a Match-the-Following or How-Many-Correct on offshore mineral block locations and polymetallic nodules.
In News
What Happened
Why It Matters
Background
History & Context
What Changed
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Allocation Method: Before the 2023 amendment, offshore blocks could be allocated through discretionary administrative grants. Now, competitive e-auctions are mandatory for the allocation of production leases.
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Licence Structure: The Act introduced a 'composite licence' allowing a seamless transition from exploration to production. Licensees get three years for exploration (extendable by two), and if resources are proven, it automatically converts to a production lease.
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Block Dimensions: The standard block size for offshore mining was drastically reduced from 5 minutes latitude by 5 minutes longitude down to 1 minute latitude by 1 minute longitude, allowing for more precise targeting of geological features.
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Welfare and Mitigation Fund: Section 16A was inserted to establish the Offshore Areas Mineral Trust. Funded by a surcharge on royalties (up to one-third), it finances offshore exploration, ecological impact mitigation, and disaster relief.
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Penalty Enhancement: Fines for conducting offshore mining activities without a valid permit were increased significantly. The maximum fine jumped from Rs 50,000 to a range between Rs 5 lakh and Rs 10 lakh.
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Area Caps: A strict limit was introduced capping the maximum area a single entity can acquire under all concessions to 45 minutes latitude by 45 minutes longitude to prevent monopolies.
What Did NOT Change
Despite the push to bring private investment into the offshore mining sector, atomic minerals such as uranium, thorium, and monazite were strictly kept out of private hands. The government clarified through the Offshore Areas Atomic Minerals Operating Rights Rules, 2025, that these strategic minerals remain exclusively reserved for government entities and public sector corporations.
Prelims Angle
NCERT Connection
Common Misconceptions
✗ Polymetallic nodules are exclusively found in deep international waters regulated solely by the International Seabed Authority (ISA).
✓ India holds commercially viable reserves of polymetallic nodules and cobalt-rich crusts entirely within its own domestic Exclusive Economic Zone (EEZ), specifically along the West Sewell Ridge in the Andaman Sea.
Media coverage heavily focuses on India's ISA contracts in the Central Indian Ocean Basin and the Clarion-Clipperton Zone in the Pacific, overshadowing the presence of these nodules within sovereign maritime boundaries.
✗ The recent legal amendments allow private companies to mine any offshore mineral, including atomic minerals, if they win the auction.
✓ Private sector participation is strictly prohibited for offshore atomic minerals (such as monazite and thorium), which are exclusively reserved for government entities and state-owned corporations.
Broad headlines announcing the 'opening of the offshore mining sector to private players' led to the assumption that all minerals were de-reserved, prompting the government to issue a clarification in 2025.
Practice Questions
Q1
How Many CorrectConsider the following statements regarding the Offshore Areas Mineral (Development and Regulation) Amendment Act, 2023: 1. It introduces a composite licence that covers both preliminary exploration and subsequent production operations. 2. It permits private sector entities to participate in the auction of atomic mineral blocks located in offshore areas. 3. It establishes the Offshore Areas Mineral Trust to fund research on mitigating the adverse ecological effects of seabed mining. How many of the above statements are correct?
Q2
Match the FollowingMatch the offshore mineral resources auctioned in India's first tranche with their respective geological regions: List I (Mineral Resource) A. Polymetallic nodules and crusts B. Lime mud C. Construction sand D. Monazite (Atomic mineral) List II (Region/Status) 1. Coast of Gujarat (Arabian Sea) 2. West Sewell Ridge (Andaman Sea) 3. Coast of Kerala (Arabian Sea) 4. Reserved for Government (Not auctioned) Select the correct answer code:
Q3
Assertion & ReasonAssertion (A): The standard size of an offshore mineral block was reduced from 5 minutes latitude by 5 minutes longitude to 1 minute latitude by 1 minute longitude under the 2023 amendment. Reason (R): The amendment restricts the maximum offshore area a single entity can acquire to 45 minutes latitude by 45 minutes longitude to prevent corporate monopolies. Select the correct answer: