India Auctions 20 Critical Mineral Blocks

December 7, 2023

India has initiated the auction of 20 blocks containing critical minerals, including lithium, essential for batteries and electric vehicles. Let’s explore the details of this significant development.

Bidding Process and Mineral Value

The auction, which began on November 29, involves lithium-rich blocks and other critical minerals like nickel, copper, and rare earth elements. The estimated total value of these blocks is Rs 45,000 crore, marking the first time rights for mining lithium ore are auctioned to private parties.

Geographical Spread of Critical Mineral Blocks

The 20 blocks are distributed across eight states: Tamil Nadu, Odisha, Bihar, Uttar Pradesh, Gujarat, Jharkhand, Chhattisgarh, and Jammu & Kashmir. Understanding where these mineral-rich blocks are located is crucial for comprehending the scope of India’s mineral exploration.

Mining License vs. Composite License

Out of the 20 blocks, only four are auctioned for a Mining License (ML), allowing immediate mining operations after obtaining necessary clearances. The remaining 16 blocks are auctioned for a Composite License (CL), permitting geological exploration before converting to an ML.

Clearances and Approvals Needed

Before commencing operations, the licensee must obtain 15 approvals and clearances, including forest and environmental clearances, Gram Sabha consent, and others. The Notice Inviting Tender (NIT) provides insights into the comprehensive process involved.

Estimated Reserves of Critical Minerals

The auction includes two lithium blocks in Jammu & Kashmir and Chhattisgarh, each holding substantial inferred reserves. Nickel, copper, molybdenum, and rare earth elements are also found in these blocks, contributing to India’s strategic reserves.

Current Import Dependency and Future Prospects

As of now, India heavily depends on imports for lithium, nickel, and copper. The ongoing auction aligns with the government’s efforts to reduce import reliance and strengthen the country’s mineral security.

Future Auctions and Exploration Projects

Following this auction, plans for a second tranche of critical mineral blocks are underway. The Geological Survey of India is actively exploring critical mineral reserves, indicating a long-term strategy for securing India’s mineral wealth.

Establishing a Centre of Excellence

To further strengthen India’s position in critical minerals, recommendations include establishing a Centre of Excellence. This center would frame policies and incentives, fostering a complete value chain for critical minerals in the country.

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