Mines Ministry to Launch First Ever Tranche of Critical and Strategic Minerals Auction
New Delhi: In a groundbreaking move, the Ministry of Mines is set to kick off the first tranche auction of critical and strategic minerals on November 29th. Union Minister of Coal, Mines, and Parliamentary Affairs, Pralhad Joshi, will inaugurate this historic initiative, marking the launch of the first-ever critical minerals auction process, said a press release from the Mines Ministry.
This significant development involves the auction of twenty blocks of critical and strategic minerals strategically spread across the country. The endeavor is not only expected to invigorate the national economy but also fortify national security and facilitate the nation’s transition towards a clean energy future.
Critical minerals, such as lithium, graphite, cobalt, titanium, and rare earth elements (REE), play a pivotal role in economic development and national security. The scarcity or concentration of these minerals’ extraction in a few nations can lead to vulnerabilities in the supply chain. With India committed to achieving 50% of cumulative electric power from non-fossil sources by 2030, the demand for these critical minerals is anticipated to surge. This ambitious energy transition plan is poised to drive demand for electric vehicles, wind and solar energy projects, and battery storage systems.
The auction is a response to the high demand for Critical and Strategic Minerals, typically met through imports. These minerals are integral to sectors like renewable energy, defense, agriculture, pharmaceuticals, high-tech electronics, telecommunications, transport, and the creation of gigafactories.
In a recent amendment to the MMDR Act on August 17, 2023, 24 minerals were designated as Critical and Strategic. This amendment empowers the Central Government to grant mineral concessions for these minerals, enabling prioritized auctions based on the country’s requirements. The revenue generated from these auctions will benefit the respective State Governments. Further, royalty rates for critical minerals have been rationalized to encourage greater participation in auctions.
The Government specified royalty rates for Platinum Group of Metals (PGM) at 4%, Molybdenum at 7.5%, Glauconite, and Potash at 2.5% in March 2022. On October 12, 2023, the rates for Lithium were set at 3%, Niobium at 3%, and Rare Earth Elements at 1%.
The sale of tender documents commences on November 29, 2023, with details accessible on the MSTC auction platform. The online auction will employ a transparent two-stage ascending forward process, with eligible bidders selected based on the highest percentage value of mineral despatched quoted by them. This initiative marks a pivotal step in securing India’s mineral resources and fostering economic resilience in the face of evolving global demands.
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