 "India's critical and strategic mineral auctions face three-month delay")
India’s bid for self-sufficiency in critical minerals is facing another setback because the government has delayed the selection process for preferred bidders by three months for the first round of critical mineral blocks.
This decision comes shortly after the government in March scrapped the auction process for 13 blocks due to a lacklustre interest from potential investors.
According to a Ministry of Mines notice, the final date to select the preferred bidders for the remaining seven mineral blocks has been deferred till July 8 from April 18.
With the initial auction round, valued at Rs 45,000 crore, encountering obstacles, industry experts anticipate delays in the timeline for the second auction round as well.
“Not just this round but also the next round is likely to struggle to attract bidders due to the lack of clarity regarding available resources,” an industry expert said.
The query sent to the ministry, seeking reasons for delaying the auction process, remained unanswered until the time of going to press.
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While government sources attribute the delay to the Lok Sabha elections, experts disagree. An expert said this raised questions as to why technically qualified bidders (TQBs) had not been selected thus far.
“Why has the government postponed the announcement date of TQBs instead of simply halting the announcement of qualified bidders?” the person asked.
The Centre inaugurated the first round of critical minerals auction in November, with March 11 initially set as the final date for the selection of preferred bidders. However, it has been amended twice since then.
On March 13, the government announced cancelling 13 blocks, with two receiving no bid and 11 having fewer than three TQBs. The two blocks that did not attract any bids are molybdenum minerals in Tamil Nadu.
The maiden auction of critical minerals by the Centre has faced a setback with close to seven blocks, including the lithium block in Jammu & Kashmir (J&K), finding almost no takers, Business Standard recently reported.
A total of 56 physical bids and 56 online bids were received for 18 of the 20 blocks, a ministry statement said.
According to the Mineral (Auction) Rules, 2015, if the number of TQBs is less than three, no TQB is considered a qualified bidder, and the first attempt of the auction is annulled. Since the ministry failed to secure a minimum of three bids for these blocks, it announced a second auction round for seven blocks on March 14.
During the launch of the auction process on November 29, Union Mines Minister Pralhad Joshi expressed confidence that India would achieve self-sufficiency in critical minerals. He estimated the value of these blocks at Rs 45,000 crore.
However, experts expressed scepticism regarding India’s ability to achieve self-sufficiency in critical minerals. This is due to lack of clarity on the potential data of the reserves.
According to the United Nations Framework for Classification of Resources, the exploration of minerals is divided into four stages — G4 (reconnaissance), G3 (prospecting), G2 (general exploration), and G1 (detailed exploration).
In addition to the lack of clarity on reserves, the high cost of investment in exploration has deterred potential investors from participating in the bidding process.
This setback raises concern about India’s ability to reduce its reliance on import.
Most of these minerals are imported from China, which is the leader in the global production and supply of these resources.
With investors failing to bid, experts suggest India continue to rely on China for securing its raw materials.
The Centre has initiated the auction of 38 critical and strategic minerals to date. The initial tranche included 20 blocks, while the subsequent tranche had 18.
Key dates
Announcement of technically qualified bidders: Originally April 1, now extended to June 28
Intimation to qualified bidders: Originally April 2, now extended to July 1
E-auction & final offer submission: Originally April 2, now July 1