Govt to launch second round of critical mineral auctions on Feb 29

The Mines Ministry will launch the second round of critical and strategic minerals auction on Thursday.

The auction shall be held online through a two-stage ascending forward auction process. The eligible bidder shall be selected based on the highest percentage of the value of mineral despatched quoted by them.

“The commencement of sale of tender document shall start from February 29,” a Ministry official said.

As per a statement, Union Minister Pralhad Joshi will launch the auction, and letters of financial grants will be handed over to the start-ups in mining and mineral sector too.

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The lack of availability of critical minerals or concentration of their extraction or processing in a few countries may lead to supply chain vulnerabilities, the statement by the Ministry said, adding that the future global economy will be underpinned by technologies that depend on minerals such as lithium, graphite, cobalt, titanium and rare earth elements (REE).

In 2023, India had announced its critical and strategic mineral list that included ones like lithium, molybendium, titanium, copper, among others.

Push for Critical Minerals

The first tranche of critical mineral auctions that took place late last year (in 2023) covered minerals such as lithium (two blocks), copper, nickel, glauconite, graphite and manganese, molybendum. It covered 20 mineral blocks across eight-odd states.

Critical minerals like lithium form the corner stone for India’s push towards reduction in carbon footprint and switch-over to green-energy.

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India has committed to achieve 50 per cent of cumulative electric power installed capacity from non-fossil sources by 2030. This would lead to an increase in demand for electric cars, wind and solar energy projects and battery storage systems thereby increasing the demand for these minerals.

In a bid to popularise private investments in the segment, India recently amended the MMDR Act whereby 24 minerals were notified as critical and strategic ones.

The amendment confers the power to grant mineral concession of these minerals to the Central Government so that the Central Government can prioritise auction of these minerals looking at the requirements of the country. The revenue generated from these auctions shall accrue to the State governments.

Lithium reserves

Apart from tapping into own resources, India has also entered into a development and off-take agreement with Argentina for lithium. Five blocks have been acquired in the Lat-Am nation – a first by India.

In India, lithium reserves have been announced in Jammu & Kashmir and Chhattisgarh – and these two blocks were put up in the first tranche of the auctions.

Some initial findings have also been reported in Karnataka and Madhya Pradesh while exploration is on in other States.

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