¹[12. Grant of composite licence.--(1) The administering authority may, in respect of an offshore area where the existence of mineral resources has not been adequately established for grant of a production lease as required by the second proviso to section 6, after inviting applications in this behalf, select any person for grant of a composite licence, who--
     (a) fulfils the eligibility conditions as specified in this Act and such conditions as may be prescribed; and
     (b) is selected through auction by method of competitive bidding, including e-auction, conducted on the basis of such terms and conditions, manner and bidding parameters, as may be prescribed.
    (2) The Central Government shall grant the composite licence to the person selected in accordance with the procedure laid down in sub-section (1).
     (3) The licensee shall complete the exploration operations satisfactorily, as specified in the notice inviting applications, within a period of three years from the date of grant of the composite licence: Provided that the administering authority may, on an application made by the licensee three months before the lapse of the said period, for reasons to be recorded in writing and subject to such conditions as may be prescribed, grant an extension for a period of two years to the licensee for satisfactory completion of the exploration operations:
     Provided further that no further extension shall be granted upon expiry of the extended period, if any, granted under the first proviso.
     (4) The area granted under a composite licence shall comprise of contiguous standard blocks, which in aggregate do not exceed an area of thirty minutes latitude by thirty minutes longitude.
     (5) Every licensee shall, on being granted a composite licence, commence and carry out exploration operation subject to such terms, milestones and relinquishment requirements, as may be prescribed.
     (6) A licensee, who has adequately established the existence of mineral resources in an offshore area held under the composite licence, or part thereof, as required by the second proviso to section 6, shall, within the period specified or extended under sub-section (3), subject to such terms and conditions, and on making an application to the administering authority in such form, as may be prescribed, be granted one or more production leases:
     Provided that such licensee--
     (a) is not in breach of the terms and conditions of his composite licence;
     (b) continues to be eligible for grant of a production lease in accordance with section 6; and
     (c) has applied for grant of production lease within six months of completion of his exploration operations:
     Provided further that the total area of such production lease or production leases, granted in pursuance of a single composite licence, shall not exceed fifteen minutes latitude by fifteen minutes longitude.
     (7) The administering authority shall, on receipt of an application under sub-section (6), and on being satisfied that the licensee meets the requirements under the provisions of this Act and the rules made thereunder, recommend to the Central Government for grant of production lease to such licensee.
     (8) The Central Government shall, on receipt of a recommendation under sub-section (7) from the administering authority, grant production lease to the licensee in accordance with such procedure as may be prescribed.
     (9) Every production lease granted in pursuance of a composite licence shall be for a period of fifty years.
     (10) All rights and interests held under a composite licence in the parts of an offshore area, in respect of which no production lease is granted, shall cease to exist upon expiry of the composite licence.
     (11) The provisions of this section shall not apply to--
     (a) the areas covered under section 8; and
     (b) the minerals specified in Part B of the First Schedule to the Mines and Minerals (Development and Regulation) Act, 1957, (67 of 1957) where the grade of atomic mineral is equal to or greater than such threshold value, as the Central Government may, by notification in the Official Gazette, specify]