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Mining for critical minerals: what is the auction process, and why is it important?

  • Published
    7th Dec, 2023


Critical minerals are the resources of the future — and essential for the country’s economic development and national security. The government has identified 30 of these minerals, and created a legal framework for their mining in India.

Critical Mineral Auctions Unveiled

  • First-Ever Lithium Auction: Private sector involvement in lithium mining is introduced through this auction, marking a significant step toward self-reliance and reducing import dependence for India's burgeoning energy needs.
  • Strategic Mineral Locations: Spread across eight states, the mineral-rich blocks are located in Tamil Nadu, Odisha, Bihar, Uttar Pradesh, Gujarat, Jharkhand, Chhattisgarh, and Jammu & Kashmir, emphasizing the geographical diversity of India's mineral wealth.
  • Mining Rights Auction Structure: Four blocks are auctioned for Mining Licences (ML), enabling immediate mining operations, while 16 are auctioned for Composite Licences (CL), allowing geological exploration before obtaining an ML.

Exploration and Operations Framework

  • Composite Licence (CL): Auctioning 16 blocks under CL allows licensees to conduct geological exploration, gaining data on mineral deposits. They can then apply for an ML after three to five years, subject to clearances.
  • Mining Licence (ML): The four ML blocks, located in Odisha and Tamil Nadu, permit immediate mining operations once the licensee obtains necessary approvals, reflecting a faster path to extraction.
  • Clearances and Approvals: Beyond licensing, successful bidders must secure 15 clearances, including forest and environmental clearance, Gram Sabha consent, and others, ensuring adherence to regulatory standards.

Estimates and Reserves

  • Lithium Reserves: Two lithium blocks, auctioned for CL in Jammu & Kashmir and Chhattisgarh, project promising reserves, with the former holding more than 3,400 tonnes of lithium metal content.
  • Nickel Ore Reserves: Three blocks, including one in Odisha, feature nickel ore reserves, with the Odisha block also containing copper deposits, contributing to India's strategic metal requirements.
  • Regulatory Landscape: Considering 17% of the total concession area involves forest land, the need for clearances highlights the government's commitment to balancing mineral extraction with environmental sustainability.
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