India Confirms Auction Date for 20 Blocks of Critical Minerals, Including Lithium and Graphite: November 29
India has confirmed that it will solicit bids for 20 critical mineral blocks, encompassing minerals such as lithium and graphite on November 29.
Previously, Mines Secretary Shri V.L. Kantha Rao had briefed members of the media after inaugurating the mining pavilion “Connecting Beyond Mining” at the India International Trade Fair 2023 (IITF) on November 14 that the auction could be expected in two weeks.
The sale of tender documents will commence on November 29, 2023. Information regarding mineral blocks, auction terms, timelines, etc., can be found on the MSTC auction platform at www.mstcecommerce.com/auctionhome/mlcl/index.jsp starting from 6 pm on November 29, 2023. The auction will take place online through a transparent two-stage ascending forward auction process. Eligible bidders will be selected based on the highest percentage of the value of mineral dispatch quoted by them.
The tranche auction of critical and strategic minerals aligns with India’s overarching strategy to secure ample domestic reservoirs of vital raw materials pivotal for driving growth and R&D innovation in frontier industries. Critical minerals cater to the needs of sectors like renewable energy, defence, agriculture, pharmaceutical, high-tech electronics, telecommunications, transport, creation of gigafactories etc.
India has been actively seeking means to ensure a stable supply of lithium, a crucial raw material essential for manufacturing electric vehicle batteries. In February this year, the country identified its inaugural lithium deposits in Jammu and Kashmir, estimating reserves to be approximately 5.9 million tonnes.
State-owned enterprises are also pursuing opportunities worldwide in search of these valuable mineral resources. Domestic energy giants Coal India Ltd. and NTPC Ltd. are carefully planning their entry into the mining sector to harness these essential materials, which will fuel the green sector.
Building global partnerships to secure supply chains
Beyond domestic resources, India is also tapping into global partnerships. New Delhi has sought a strategic partnership with Australia to secure its critical mineral supply chain. The two countries will jointly invest $3 million each in five exploration projects in Australia.
Legacy Iron Ore, in collaboration with NDMC Ltd. (India’s largest iron ore company), is actively involved in exploring and developing mineral projects in Western Australia, focusing on iron ore, manganese, gold, and base metals.
Further, KABIL (Khanij Bidesh India Limited) is set to make a significant investment in Australia’s rare earth sector, via a joint venture of three state-run Indian firms and the Critical Minerals Office under Australia’s Department of Industry, Science and Resources.
NMDC, a Public Sector Enterprise under India’s Ministry of Steel, is conducting pre-feasibility studies (PFS) for magnetite iron ore and lithium mining in Australia through its Australian subsidiary, Legacy, in collaboration with Hancock Mining, the world’s fifth-largest mining company. This stage is typically an early analysis of a potential mining project, aim to provide essential information for decision-making, covering logistics, capital requirements, and key challenges.
NMDC will commence the PFS studies for its lithium mines in Australia from April 2024, as stated by Amitava Mukherjee, the Chairman cum Managing Director (Additional Charge) and Director (Finance). Mukherjee anticipates completing the preliminary feasibility studies around October to November 2025.
NMDC is also exploring a gold bearing zone near the Laverton area in Australia and has commissioned a “very small gold mine”.
Besides Australia, India is reportedly in talks with Chile and Bolivia in South America, to tap into their lithium mineral assets. With Argentina, the Mines Ministry is said to be negotiating the acquisition of mining blocks. Meanwhile, for Chile, the ministry is in the process of finalizing non-disclosure agreements.
Hyderabad-based battery materials manufacturer, Altmin, has entered into a strategic agreement with Bolivian state company Yacimientos de Litio Bolivianos (YLB) to establish a pilot plant for active materials, aiming to manufacture lithium-ion batteries in Bolivia. The collaboration focuses on the development of the raw materials supply chain and the production of cathode active materials (CAMs) for lithium-ion batteries, aligning with both countries’ industrialization efforts in this critical resource sector. The alliance aims to produce over 10 gigawatt hours (GWh) of lithium iron phosphate (LFP) by 2030. Altmin Founder & MD Mourya Sunkavalli emphasized the strategic advantage of securing a stable supply of lithium carbonate from Bolivia, the world’s largest producer of this resource.
Regulatory reforms in India’s mining sector
In July, India revised its mining regulations with the aim of enhancing the exploration of critical minerals like lithium by permitting private miners to actively search for these materials. These regulatory changes will play a crucial role in the auctioning of recently identified lithium blocks in Jammu and Kashmir and Karnataka state.
In October, India’s cabinet granted approval for royalty rates concerning three critical and strategic minerals. The endorsed royalty rates for lithium, niobium, and rare earth elements (REE) are:
- Lithium – 3% of London Metal Exchange price
- Niobium – 3% of Average Sale Price (both for primary and secondary sources)
- REE – 1% of Average Sale Price of Rare Earth Oxide
Why these developments hold crucial to the trajectory of India’s development
Critical minerals have become integral to India’s economic development and national security. Notably, minerals like lithium and rare earth elements have gained significance in light of India’s commitment to energy transition and the goal of achieving net-zero emissions by 2070.
The strategic importance of lithium, niobium, and REEs is further underscored by their uses and the geopolitical landscape. Encouraging domestic mining is anticipated to reduce imports and foster the establishment of related industries and infrastructure projects, consequently contributing to increased employment opportunities in the mining sector.
China accounted for 70 percent of global mining of rare earths in 2022, followed by the US, Australia, Myanmar, and Thailand, per data from the US Geological Survey (USGS). In addition, China produces 85 percent of rare earth finished products, 85 percent of rare earth oxides, and controls 95 percent of rare earth manufacturing. In October this year, China announced it would require permits for the export of some graphite products, in the interest of national security. The move is widely been read as a retaliation for US curbs on sales of high-tech to China, and is indicative of how the country’s dominant position can be used to its advantage. China also dominates other critical mineral supplies, including forms of refined cobalt, nickel, and manganese, which are used in electric vehicle batteries.
The Geological Survey of India (GSI) recently submitted the exploration report for REE and lithium blocks. Additionally, the GSI and other exploration agencies are actively conducting surveys for critical and strategic minerals across the country. The Central Government will soon launch the initial tranche of auctions for critical and strategic minerals, including lithium, REE, nickel, platinum group elements, potash, glauconite, phosphorite, graphite, molybdenum, and more.
This article was originally written November 14, 2023. It was last updated November 28, 2023.
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