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

• India recently initiated auctions for 20 critical mineral blocks, including lithium for commercial mining by the private sector.
• This is the first time that rights related to the mining of lithium ore are being auctioned to private parties.
• Other minerals in the blocks include nickel, copper, molybdenum and rare earth elements (REEs).
• Objective: To reduce dependence on imports and promote self-reliance in key sectors like batteries, electric vehicles, and industrial processes.

Location and Types of Blocks

• The 20 blocks are spread across eight states viz. Tamil Nadu, Odisha, Bihar, Uttar Pradesh, Gujarat, Jharkhand, Chhattisgarh and Jammu & Kashmir.
• Four blocks are auctioned for Mining Licences (ML), allowing immediate mining operations.
• The remaining 16 are auctioned for Composite Licences (CL), enabling geological exploration before conversion to ML.

Clearances and Approvals

• The auctioned blocks, covering a total area of 7,197 hectares, include forest land, requiring approvals such as forest clearance, environmental clearance and Gram Sabha consent.
• Successful bidders must obtain 15 clearances before commencing operations, emphasising adherence to regulatory standards.

Estimated Reserves of Key Minerals

• Lithium: Two blocks in Jammu & Kashmir and Chhattisgarh with inferred reserves. The J&K block contains 5.9 million tonnes of bauxite column with over 3,400 tonnes of lithium metal content.
• Nickel: Reserves found in Bihar, Gujarat, and Odisha. The Odisha block, also containing copper, has inferred nickel reserves of 2.05 million tonnes.
• Copper: The Odisha block has 6.09 million tonnes of copper ore and 28,884 tonnes of copper metal content.

India’s Imports

• India currently imports 100% of its lithium and nickel demand, and 93% of copper demand.
• In FY23, imports included 2,145 tonnes of lithium carbonate and lithium oxide, 32,000 tonnes of unwrought nickel and 1.2 million tonnes of copper ore.

Post-Auction Plans

• After the ongoing auction, the government plans to initiate a second tranche of critical mineral block auctions.
• The Geological Survey of India has undertaken 125 projects in the current fiscal year to explore critical mineral reserves.
• Recommendations include establishing a Centre of Excellence for Critical Minerals to frame policies and incentives.