Policy on Beach Sand

1. Under the Industrial Policy Resolution of 1956, exploitation of the minerals specified in the Schedule to the Atomic Energy (Control of Production & Use) Order, 1953 (an Order issued under the Atomic Energy Act, 1948) was reserved for industries to be set up only by the State. The minerals specified in the abovementioned Order of 1953 included minerals like monazite, ilmenite, zircon and rutile, obtained in India mainly from the beach sand deposits in the coastal States. These minerals were subsequently also notified as "prescribed substances" under the Atomic Energy Act, 1962. They are also included in the list of "atomic minerals" in Part B of the First Schedule to the Mines & Minerals (Regulation & Development) Act, 1957.

2. The Statement on Industrial Policy of 1991 retained the industries relating to exploitation of these minerals in the list of industries reserved for the public sector with, however, an enabling provision to allow selective entry of the private sector.

3. The Policy on Exploitation of Beach Sand Minerals notified by the Government of India (Department of Atomic Energy) under Resolution no.8/1(1)/97-PSU/1422 dated 06 October 1998 is in this latter context. A copy of the Resolution is enclosed (Annex I).

4. Also included in this compendium are copies of/extracts from the following Acts/Rules/Notifications which are relevant in the context of the current policy:

Sections 1, 2, 3, 14 & 24 of the Atomic Energy Act, 1962 (Annex II).

Government of India, Department of Atomic Energy, Notification dated 15.03.1995 specifying the prescribed substances in terms of clause (g) of sub-section (1) of section 2 of the Atomic Energy Act, 1962 (Annex III).

Atomic Energy (Working of the Mines, Minerals and Handling of Prescribed Substances) Rules, 1984 (Annex IV).

Government of India, Department of Atomic Energy Notification dated 17.01.1992 notifying Chairman, Atomic Energy Regulatory Board as the Competent Authority for the purposes of the Rules at sr.no.(3) (Annex V).

Government of India, Department of Atomic Energy, Order dated 15.03.1995 appointing Joint Secretary, Department of Atomic Energy, Government of India as the Licensing Authority for the purposes of the Rules at sr.no.3 (Annex VI).

5. Section 14 of the Atomic Energy Act, 1962 and the Rules referred to at sr. no. (3) above are of direct importance to exploitation of beach sand minerals. Questions relating to the contents of this compendium may be addressed to Under Secretary (I&M), Department of Atomic Energy, Anushakti Bhavan, CSM Marg, Mumbai-400 039.

6. It is hoped that this compendium will be useful to all entities dealing with the abovementioned minerals.

India has large reserves of beach sand minerals in the coastal stretches around the country. Ilmenite is the largest constituent of the Indian deposits, others being rutile, leucoxene, zircon, sillimanite, garnet and monazite. The minerals other than garnet and sillimanite have been classified as "prescribed substance" under the Atomic Energy Act, 1962. In accordance with the provisions of the said Act and the Rules/Notification/Orders thereunder, it is mandatory to obtain licence from the designated competent authority in the Department of Atomic Energy for working of any mines and minerals from which prescribed substances can be obtained as well as for acquisition, production, possession, use, disposal, export or import of prescribed substances.

Under the Industrial Policy Statement of 1991, the mining and production of minerals classified as "prescribed substances" is reserved for the public sector. However, the Policy Statement also allows selective entry of the private sector. At present, the Indian Rare Earths Limited (IREL), a Government of India (Department of Atomic Energy) undertaking and Kerala Minerals & Metals Ltd. (KMML), a Government of Kerala undertaking are engaged in mining, production and processing of these minerals from the beach sand deposits at a few locations in Orissa, Tamil Nadu and Kerala. Considering the growing demand for these minerals and/or their value-added products in the domestic as well as international markets and the potential available in the country, setting up of new plants for exploitation of the deposits in fresh locations would be in the interest of the country. Production of various value-added products of these minerals is, however, highly capital intensive and it may not be possible for only the PSUs (both Central and State owned) operating in this field to set up the new plants on their own. It is, therefore, necessary to allow the private sector to set up such plants within the framework of some broad guidelines.

In view of the background explained above, Government of India has recently approved a policy to encourage further exploitation of these mineral deposits through a judicious mix of public and private sector participation (including foreign investment). The other objectives of the policy are maximisation of value addition to the raw minerals within the country, upgradation of the existing process technologies to international standards, attracting funds and new technology necessary for this purpose through participation of the private sector (domestic and foreign), appropriate dispersal of the new production facilities with an eye on regional balance and regulating the rate of exploitation of the reserves by the facilities such that the exploitable reserves last for about hundred years without, of course, adversely affecting the investors' techno-economic considerations regarding plant size, etc.

With these objectives in view, the activities in this field have been placed in three categories :

1. Mining and mineral separation.

2. Value addition per se to the products of (i).

3. Integrated activities (comprising both (i) and (ii)).