Ministry of Mines Issues Tender for 20 Critical Minerals Blocks

The last date for the submission of bids is January 22, 2024


The Ministry of Mines has invited bids for the grant of concessions for 20 critical mineral blocks across seven states and one union territory. The selection of eligible bidders will be based on the highest percentage of the value of mineral despatched quoted by them.

The last date for the submission of bids is January 22, 2024.

The tender document and applicable GST are priced at ₹300,000 (~$3,600).

The total area allocated for the first-ever critical minerals auction is 463.995 hectares.

The Ministry has identified four mineral blocks for mining leases (ML) and 16 mineral blocks for composite licenses (CL), intending to conduct an electronic auction.

The critical minerals essential for renewable energy listed in the auction include Lithium, Bauxite, Graphite, Nickel, Chromium, Copper, Manganese, and Molybdenum Ore.

The list of the mineral blocks for the auction is as follows:

The reserve price is fixed at 2% for 19 blocks, except for the Kurchha Glauconite Block in Uttar Pradesh, which is set at 2.03%.

Bidders must acquire clearances to commence mining operations. This includes obtaining forest clearance, wildlife clearance for sanctuaries, reserves, or special zones, environmental clearance, and approval for the mining plan.

The preferred bidder must also secure consent to establish an explosive license, permission for mine opening, and approval for equipment installation or trial operation. Groundwater clearance at the central and state levels and approvals for railway siding, diesel storage, and power lines from the state’s power distribution company.

The preferred bidder must obtain clearances related to working under existing transmission lines or shifting such lines, village authority consent, and any other clearances necessary to initiate mining operations.

The initiative aligns with India’s commitment to achieving 50% of cumulative electric power installed capacity from non-fossil sources by 2030.

The energy transition plan is expected to boost the demand for electric vehicles, wind and solar energy projects, and battery storage systems, consequently increasing the demand for these critical minerals.

The significance of critical and strategic minerals lies in their essential role across various sectors such as renewable energy, defense, agriculture, pharmaceuticals, high-tech electronics, telecommunications, transport, and the establishment of gigafactories.

The demand for these minerals is being met mostly through imports.

The government this year amended the Mines and Minerals (Development and Regulation) Act to allow private companies to explore and mine critical minerals. Earlier, critical mineral exploration and mining were preserved by the public sector.

Royalties for critical minerals have been rationalized to encourage more participation in auctions. In March 2022, the government specified royalty rates for Platinum Group of Metals (PGM) at 4%, Molybdenum at 7.5%, and Glauconite and Potash at 2.5%.

Subsequently, on October 12, 2023, royalty rates for lithium were set at 3%, nickel at 3%, and rare earth elements at 1%.

In June, India unveiled its first-ever report on “Critical Minerals for India,” identifying a list of 30 critical minerals, comprising lithium, cobalt, nickel, graphite, cadmium, silicon, indium, and tellurium used in renewables.

In September, the government announced a 25% incentive on the approved project cost for exploration agencies in a bid to enhance the exploration of critical minerals. The decision aims to expedite the discovery and extraction of critical minerals, reduce the country’s dependence on imports, and foster self-sufficiency in these vital resources.