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The Ministry of Mines will launch the first auction of offshore critical mineral blocks this Thursday, marking a major milestone in India's push to tap into the blue economy. Thirteen blocks are set to go for bidding in this inaugural round.
“This first tranche includes 13 carefully selected mineral blocks spanning across the Arabian Sea and the Andaman Sea, featuring a mix of construction sand, lime mud, and polymetallic nodules,” the mines ministry said.
Offshore mining involves extracting valuable mineral resources like construction-grade silica sand, lime mud, calcareous mud, precious metals, and rare earth elements from beneath the seabed or ocean flood. These resources are scattered across the Indian Ocean, the Arabian Sea, and the Bay of Bengal, which surround the Indian peninsula.
India’s first offshore mining venture is expected to yield essential materials such as construction sand and polymetallic nodules, which are rich in metals like manganese, nickel, and cobalt—critical components in the production of batteries and electronics.
India is set to explore its vast exclusive economic zone (EEZ), an area covering roughly 2.37 million square kilometres and extending 200 nautical miles (370.4 kilometres) from the baseline of its territorial waters. The exploration could significantly expand the country’s obvious geological potential (OGP) area (mineral prognosticate area), which currently spans 688,000 square kilometres.
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In August 2023, Parliament amended the Offshore Areas Mineral (Development and Regulation) Act, 2002, instituting an auction-based approach for allocating mineral blocks in offshore areas. The move is expected to streamline the granting of production leases and composite licenses for exploration and extraction of resources.
This auction is the latest in a series of steps following the Centre's onshore critical mineral auctions, which began in November 2023. In the past year, four rounds have been held, offering 22 blocks of critical minerals like lithium, vanadium, graphite, cobalt, and manganese.
Offshore mining, however, comes with its own set of challenges. To mitigate this, the Centre has introduced the Offshore Areas Operating Right Rules, 2024, allowing lessees to surrender their entire lease area after 10 years if production operations are deemed uneconomical. This provision aims to make offshore mining more viable in the long term.
Under the new rules, mineral exploration and production in offshore areas will only be permitted following an official gazette from the administering authority. The rules prioritise government bodies, state-owned companies, and corporations in securing rights for offshore zones, with production leases for government entities lasting up to 50 years. Composite licences for both exploration and production will last for three years, with private entities eligible to bid in a competitive auction for rights.
To ensure the auction’s success, the Offshore Areas Mineral (Auction) Rules, 2024, allow the process to continue even if only one technically qualified bidder remains after the initial round. If no bids are placed in the second round, the auction can be restarted from scratch in a 'de novo' process, giving bidders a fresh chance to participate.
What’s in store?
- Resources are scattered across the Indian Ocean, the Arabian Sea, the Bay of Bengal
- Venture likely to yield essential materials such as construction sand and polymetallic nodules, which are rich in metals like manganese, nickel, and cobalt
- Will explore the exclusive economic zone, an area covering 2.37 million sq kms
- Will expand the country’s obvious geological potential area, which currently spans 688,000 square kms
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