India to start critical mineral blocks auction process this year

30th August 2023 By: Bloomberg

India is preparing to start the auction process for some 100 critical mineral blocks in the next four months, as part of plans to secure domestic supplies of the raw materials needed to fuel the green energy transition.

The blocks are for minerals including nickel, lithium, cobalt and platinum, along with rare earths, Mines Secretary Vivek Bharadwaj said in an interview in New Delhi.

“The legal framework has been laid out and the blocks have been identified,” Bharadwaj said. The tender seeking bids is expected to be out by December and auctions may start three months later, he added.

The South Asian nation is racing to ensure critical minerals security to power its ambition to make the country a key battery and electric vehicles manufacturing hub and help attain a net zero goal. India currently doesn’t mine key materials like lithium, cobalt and nickel locally.

In order to incentivize global and local miners to participate in the process, the government is planning to reimburse half the cost of exploration, Bharadwaj said. Companies may take at least three years to bring the mines into operation, he added.

India changed its mining rules last month in a bid to boost exploration of some critical minerals like lithium by allowing private miners to search for the materials. The reforms will be key for auctioning lithium blocks recently identified in Jammu and Kashmir, and Karnataka state.

Some state-run companies have been scouring the globe for such assets while energy heavyweights Coal India Limited and NTPC are mapping out plans to mine the materials. Khanij Bidesh India, a joint venture of three government-run firms, has been created to purchase critical mineral assets overseas, mainly in Australia and South America.