Coal India forays into critical mineral mining in Madhya Pradesh

CIL won the bid by quoting a mining premium of 150.05 per cent of the value of the mineral dispatch, which it will pay to the State of Madhya Pradesh

Public-sector company Coal India Ltd (CIL) has stepped into mining critical minerals.

On Monday, CIL said it had got its first critical-mineral asset, a graphite block in Madhya Pradesh. Graphite is crucial for lithium-ion batteries, used in electric vehicles and renewable energy storage.

By acquiring the composite licence for the 599.76-hectare graphite block, CIL has become the first major player in the critical-mineral auction.

India’s maiden critical-mineral auction, launched last year, has faced a setback, with 28 of the 38 blocks being annulled by the Centre due to a lack of interest from potential bidders.

“CIL has successfully opened its account in domestic critical mineral assets emerging as the preferred bidder for Khattali Chotti graphite block in Alirajpur district of Madhya Pradesh,” the company said in the statement.

 

Amid a tepid response from major players during the first round of auctions, CIL emerged as the largest entrant into the critical mineral-mining sector. This is despite the mines ministry announcing that Vedanta, CIL, and NLC India, alongside Ola Electric, Jindal Power, the Dalmia group, and Shree Cement are participating as bidders for 20 blocks in the initial phase of the auction for critical-mineral blocks.

In the first round, five companies — Agrasen Sponge, Kundan Gold Mines, Dalmia Bharat Refractories, Sagar Stone Industries, and Maiki South Mining — secured bids for six critical mineral blocks, which included graphite, manganese, phosphorite, lithium, and rare earth elements, with auction premiums ranging from 13.05 per cent to 400 per cent.

CIL won the bid by quoting a mining premium of 150.05 per cent of the value of the mineral despatch, which it will pay the Madhya Pradesh government, CIL stated in a press release.

The block was part of the second tranche of auctions launched on February 29, with forward auctions held on July 9 by the Ministry of Mines.

This is not the first time CIL has shown an interest in critical minerals. The company, along with other public- and private-sector firms, is scouting graphite mines in Sri Lanka, Business Standard reported earlier this month.

CIL is also pursuing lithium blocks in Chile, Australia, and African countries.

By becoming the successful bidder for the Madhya Pradesh block, CIL is set to play a major role in the domestic critical-mineral sector. Based on five bedrock samples in the Khattali Chhoti block, the fixed carbon content ranges from 1.99 per cent to 6.50 per cent.

India imports about 69 per cent of its graphite needs — natural, synthetic and end-use products. Currently the graphite mining industry has a limited number of players and this offers space for willing participants, CIL said in a statement.

Graphite has its utility as anode material in lithium-ion battery manufacturing due to its relatively low cost and energy density.

With the electric-vehicle market and energy-storage systems, where lithium ion cells are used, fast gaining traction, graphite has a big market.

Owning a graphite asset will give CIL an edge in powering the green energy transition. The company can use its decades of experience in coal mining in taking advantage of it.

Talking points
 

- CIL acquired the composite licence for the 599.76-hectare graphite block

- Firm is the first major player in the critical mineral auction

- It won the bid by quoting a mining premium of 150.05% of the mineral despatch value

- CIL along with other PSUs and private companies is scouting graphite mines in Sri Lanka

- Coal India is also actively pursuing lithium blocks in Chile, Australia, and various African nations