Govt to launch first-ever auction of critical mineral blocks on Wednesday

The lack of availability of these minerals or concentration of their extraction or processing in a few countries may lead to supply chain vulnerabilities

The Ministry of Mines is set to launch the first ever tranche auction of critical and strategic minerals on Wednesday. Union Minister of Coal, Mines and Parliamentary Affairs Pralhad Joshi will inaugurate the process of auctioning 20 blocks of critical and strategic minerals, the ministry said in a statement.

“The details of the mineral blocks, auction terms, and timelines will be made available on the auction platform of MSTC — a Miniratna Category-I public sector undertaking under the administrative control of the Ministry of Steel — at 6 pm on November 29, 2023,” the ministry said.

The auction process will be conducted online through a two-stage ascending forward auction process, with eligible bidders selected based on the highest percentage of the value of mineral dispatch quoted by them.

 

The lack of availability of these minerals or the concentration of their extraction or processing in a few countries may lead to supply-chain vulnerabilities.

“This is a landmark initiative that will boost our economy, enhance national security, and support our transition to a clean energy future,” the ministry said.

The Union government released its first critical minerals list on June 28, identifying 30 key critical minerals crucial to the nation’s economic growth and technological development last month.

Currently, the demand for critical minerals is usually met by imports.

The government had specified royalty rates for platinum group metals at 4 per cent, molybdenum at 7.5 per cent, and glauconite and potash at 2.5 per cent in March 2022.

On October 12, 2023, the government specified royalty rates for lithium at 3 per cent, niobium at 3 per cent, and rare earth elements (REE) at 1 per cent.

These are some minerals that are likely to be up for auction.

The future global economy will be underpinned by technologies that depend on minerals such as lithium, graphite, cobalt, titanium, and REE.

India has committed to achieving 50 per cent of cumulative electric power installed capacity from non-fossil sources by 2030.

Such an ambitious plan for energy transition is set to drive the demand for electric cars, wind and solar energy projects, and battery storage systems, thereby increasing the demand for these critical minerals.

Critical minerals also cater to the needs of sectors like renewable energy, defence, agriculture, pharmaceutical, high-technology electronics, telecommunications, transport, the creation of gigafactories, etc.