India: Critical mineral auctions rollout soon; govt asks industry to scout for blocks overseas

With the world adopting a clean energy transition regime on a war footing, the Central government in India has taken over the power from states to auction critical minerals and the ball will set rolling from the Ministry of Mines in a few weeks' time.

Speaking at the CII India Mining Summit in New Delhi recently, Sanjay Lohiya, Additional Secretary, Ministry of Mines, Government of India, also sounded a clarion call to industry to acquire critical mineral assets overseas where GoI will act as the facilitator and offer the requisite support, be it technical or through the Ministry of External Affairs.

Critical mineral auctions

The government, in June, had for the first time released a list of 30 critical minerals which includes antimony, bismuth, cobalt, copper, gallium, germanium, graphite, hafnium, lithium, molybdenum, niobium, nickel, phosphorous, potash, silicon, tellurium, tin, titanium, tungsten, vanadium, zirconium, selenium and cadmium amongst others.

Speaking of the impending auctions, Lohiya said the power to auction is with the Central government but only with regard to 24 minerals. But further changes in rules are in the pipeline. He also said, the auctions will not be one or two rounds in a year but, depending on the availability, many more will take place.

The government has undertaken changes in three aspects. It has removed some minerals from the list of atomic minerals - lithium for instance. Secondly, the Centre has taken over the power to auction critical minerals. Thirdly, the government has come out with the "exploration licence" concept - a two-stage bidding process.

Investing in critical mineral overseas

Lohiya exhorted industry to pick one or two countries, identity critical mineral blocks which could be of interest, talk to the Indian diaspora there or else the Indian government would be ready to act as facilitator, he emphasised. He asked industry to think of acquiring "may be even minority share, or exploration licences in other countries".

"The government is trying to acquire mineral assets abroad but private industry is much more efficient and can do at a much bigger pace than the government," he explained.

A joint venture company, Khanij Bidesh India (KABIL), has been incorporated with equity participation from NMDC, Hindustan Copper and Mineral Exploration Company (MECL) to identify and acquire overseas mineral assets of critical and strategic nature for supply-side security.

He further asked companies to identify incentives required for investing in overseas critical mineral blocks.

Critical mineral imports

India's imports of critical minerals amount to around $20 billion per annum. If imports of precious metals and other transition metals like lead-zinc are included then the total goes up to $95 billion, almost 15% of India's total imports. With economic and energy transition under way at a fast pace, imports of critical minerals will skyrocket, making the country vulnerable to supply shocks.

Thus, India needs to be self-reliant on such minerals.