Mumbai, March 17 -- The Ministry of Mines launched the first round of auctions under the exploration licence (EL) regime on Thursday, five months after amending the rules to manage EL auctions following delays by state governments.
This initial tranche features 13 blocks spread across 10 states, containing deposits of critical minerals such as gold, copper, diamonds, zinc, rare earth elements (REE), vanadium, and zirconium - essential materials for sectors like electronics, renewable energy, defence, and aerospace.
Among the 13 auction blocks, Chhattisgarh (diamonds), Jharkhand (gold and copper), and Maharashtra (tantalum and zinc) each have two, while Andhra Pradesh (REEs), Arunachal Pradesh (zinc), Gujarat (vanadium), Karnataka (gold and copper), Madhya Pradesh (platinum-group elements), Rajasthan (REEs), and Uttar Pradesh (zirconium) have one each.
The focus on critical mineral exploration will provide investors with vital data on reserves, increasing interest and participation in future auctions. To date, only 24 critical mineral blocks have been auctioned, with several auctions annulled due to low investor interest.
To foster private exploration, the Mines and Minerals (Development and Regulation) Act was revised in August 2023 to introduce the EL regime, aiming to attract junior mining firms.
Under the EL regime, successful licence holders will explore the blocks, and if viable mineral reserves are found, the blocks will be auctioned for mining licences. The EL auctions will follow a reverse bidding process, with the block being awarded to the bidder offering the lowest share of the auction premium payable by the eventual mining licence holder.
To mitigate risks for private explorers, the National Mineral Exploration Trust (NMET) launched a reimbursement scheme in June 2024, covering up to 50% of eligible expenses, capped at Rs 20 crore, for activities like geophysical investigations and drilling.
The Mines Ministry took over the EL auctions in October last year after only six out of 14 state governments, to whom blocks were assigned, initiated the auction process.
Published by HT Digital Content Services with permission from Construction World.