In a first for India, Karnataka and Rajasthan have launched an auction of exploration licenses for critical and deep-seated minerals, which play a critical role in the transition to green energy.

Karnataka has launched the auction for copper and lithium, both used in electric vehicle batteries, and Rajasthan, the auction of three blocks of rare earth elements and rare metals.

The auction will permit the exploration licensee to undertake reconnaissance and prospecting operations for the minerals mentioned in the newly inserted seventh schedule to the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act).

The new mineral concession of exploration licenses for 29 critical and deep-seated minerals was introduced after the MMDR Act was amended in 2023 to boost the exploration and mining of these minerals in the country.

The government has also identified a list of 30 critical minerals that are important for the development and acceleration of electric vehicles and renewable energy sources such as solar.

Enabled by the exploration license, junior mining companies will bring forth global expertise in the acquisition, processing, and interpretation of exploration data and leverage the risk-taking ability in the discovery of deep-seated mineral deposits through the adoption of advanced technologies.

The license holder will also explore the blocks and identify areas that can be auctioned for a mining lease and fetch better revenue to the state governments.

Earlier this year, Union Minister of Mines, Coal and Parliamentary Affairs, Pralhad Joshi, handed over 20 blocks of exploration licenses to 12 states and the union territory of Jammu & Kashmir and Ladakh. These mineral blocks contain lithium, rare earth elements, and copper, among other critical minerals.

The government has also issued the second tranche of the auction for the grant of concessions for 18 blocks across eight states, which include Andhra Pradesh, Arunachal Pradesh, Chhatisgarh, Madhya Pradesh, Maharashtra, Tamil Nadu, Karnataka and Rajasthan.