The Indian government launched the first-ever auction process for critical minerals in a bid to boost the economy while also paving the way towards clean energy. The first tranche of Rs 45,000 crore (5.36 billion) worth of 20 blocks of critical and strategic minerals was auctioned on November 29, 2023, for prospective bidders by the Indian Ministry of Mines.
The Twenty Blocks
The Union Minister of Coal, Mines and Parliamentary Affairs, Prahlad Joshi, while launching the auction process, said, “We have identified a total of 100 blocks for auction. Of these, 20 of them are being offered in the first tranches and auctions for others will take place in due course. These twenty blocks, which have been placed under the hammer, are located in different parts of the country. The mines ministry has termed this a landmark initiative to boost the Indian economy, enhance national security and support our transition to a clean energy future.”
The Centre has rationalised royalty rates of critical minerals to encourage more participation in auctions. “The government specified royalty rates for Platinum Groups of Metals. at 4%, Molybdenum at 7.5%, Glauconite and Potash at 2.5% in March 2022,” the ministry informed. Last month, the Centre specified royalty rates for Lithium at 3%, Niobium at 3%, and Rare Earth Elements at 1%. Critical minerals, including lithium, graphite, cobalt, titanium, and rare earth elements (REE), are essential for economic development and national security
Spread across the Nation
The Blocks are located in the Indian states of Uttar Pradesh, Gujarat, Jharkhand, Bihar, Odisha, Tamil Nadu, Chattisgarh, and the Union Territory of Jammu and Kashmir. As per reports, composite licensees will be issued for them, and mining licenses will be provided for the remaining four. Composite licenses are usually provided for those areas where preliminary exploration has already been conducted by the government. However, they are still needed for exploration. Meanwhile, the mining licenses are for areas with a verified minerals reserve.
Dependence on Critical Minerals
Critical and Strategic Minerals are in high demand as they cater to the needs of essential sectors such as renewable energy, defence, agriculture, pharmaceuticals, high-tech electronics, telecommunication, transport, creation of giga-factories, etc., the Ministry of Mines has added.
“The future global economy will be underpinned by technologies that depend on minerals such as lithium, graphite, cobalt, titanium, and rare-earth-elements (REE). India has committed to achieving 50 per cent of cumulative electric power installed capacity from non-fossil-fuel sources by 2030. The ministry said that such an ambitious plan for energy transition is set to drive the demand for electric cars, wind and solar energy systems, projects, and battery store systems, thereby increasing demands for critical minerals,” the ministry said.
In February 2023, India found a huge 5.9 trillion tonnes of Lithium deposits in the country’s north in Jammu and Kashmir. It was the first time when lithium inferred sources (G3) of 5.9million tonnes were found in the Salal Haimana area of the Reasi district of Jammu and Kashmir