The change in the auction process was initiated soon after the Rajya Sabha passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2023, earlier in the day. With this amendment, the Centre now has the authority to conduct the auctions for these mines, marking a departure from the practice, wherein states were responsible for the auctions.

According to the official, only 19 out of the 107 identified mines were auctioned by states in the last four years. Now, the central government will be taking prompt action to auction 88 mines where auctions were long overdue, he added.

“Many states such as Telangana, Kerala, West Bengal and Bihar among others have not done anything on the auction of critical mineral reserves in respective states. The progress in auctioning these mines have been very slow and the central government will be expediting the auction of these minerals to make India self-reliant in minerals,” he added.

The official said the Centre will only be auctioning these mines, but will not get a share of the revenue. “The revenue share from the mines will go to state governments, as was the practice earlier.”

The critical minerals that the Centre plans to auction include lithium, nickel, cobalt, and graphite, in a move that aligns with India’s energy transition targets.

Of particular significance is lithium, as it is a key component in rechargeable lithium-ion batteries, widely used for electric vehicle manufacturing as well as for large-scale battery storage systems

China currently controls 75% of global lithium refining, while India secures lithium from Hong Kong, China and the US. However, the Russia-Ukraine war has disirupted supplies, rasing costs.

Another mineral, nickel, is critical for stainless-steel manufacturing, and India entirely depends on imports. In fact, Jindal Stainless Steel recently acquired a 49% stake in an Indonesian company to secure nickel supplies.

The amendment marks a historic shift, as it relinquishes the long-standing exclusive rights of the government sector, ushering in private sector participation in the exploration of mines.

This move opens up significant opportunities for private players to engage in mining activities and play a pivotal role in shaping the future of the mining sector.

Explaining the rationale behind the move, the official said that though Australia is four times the size of India it has been able to explore far more extensively due to private participation.

“This amendment will allow junior mining companies to have the rights to start exploring minerals with a revenue-sharing arrangement with the government,” he added.

Exploration licences will be awarded to firms through an auction process. The winning bidder will be chosen, on the basis of revenue sharing demanded by the participants.

“Under the auction process, the bidding parameter will be revenue share sought by these exploration companies—the lowest revenue demand would get the exploration rights,” he said.

Updated: 02 Aug 2023, 11:27 PM IST