India kicks off the auction of critical and strategic minerals with 20 blocks

India is auctioning its first set of critical and strategic minerals, with a tranche of 20 mineral blocks, including two lithium blocks for auction.

In a move to secure India's raw material security for an economy being weaned away from its dependence on fossil fuel, the Narendra Modi Government has prioritised the development of "strategic" and "critical" minerals.

The first step was to identify these minerals, either scarce in the country or controlled by one dominant global supplier, critical to India's transition to zero emissions - it narrowed this down to 30.

It then followed up on that important exercise with an amendment to the MMDR Act freeing some of them including lithium from a reserved category, while empowering the Central Government to auction these blocks. These minerals are not just critical to the renewable, electronics, pharmaceuticals, and telecommunication sectors but also to agriculture and strategic sectors such as defence.

Tender documents are now available on the MSTC website for 20 blocks and will be available for purchase until 5pm of 16 January 2023. They have been priced at Rs 3 lakhs each not including GST payable under a Reverse charge Mechanism. The one committing to the sharing the most of his revenue (or value of dispatched ore) with the respective state government in a two-stage auction, will win the block. The cut of dates for bids, starting at 2%, is 5 pm, 22 January 2024.

Of these 4 blocks are being auctioned as mining leases: Two graphite and Manganese blocks in Odisha (Babja and Biarpalli), a Nickle and Copper block (Dudhiasol East) in Odisha again and a Molybdenum block (Marudipatti -Central) in Tamil Nadu. Molybdenum is used in steel alloys for its non-corrosive and strengthening properties, particularly in high pressure and temperature.

The remaining 16 blocks are being auctioned as Composite Licenses. The Ministry's amendment also provided for how CL's will be auctioned. And this includes the lithium block in Jammu and Kashmir whose discovery generated much excitement. The Salal-Haimna Lithium block (of 5.9 million tonnes of an average grade of 583ppm) co-occurs with Titanium and dioxide and Bauxite (Aluminous Laterite) and is being auctioned as a composite licence along with the Katghora Lithium and REE Block in Chhattisgarh.