New Delhi, November 28 Mines Ministry will be launching its first tranche of auctions for critical and strategic minerals here on Wednesday. This would be the first-ever such auction of critical minerals in India.
According to a statement from the Ministry, the first tranche will see twenty blocks of critical and strategic minerals spread across the country being auctioned.
“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 in a statement.
The auction will be held online through a transparent two-stage, ascending forward auction process.
Critical minerals are essential for our country’s economic development and national security. Their lack of availability and concentration of their extraction, processing in only a few countries may lead to supply chain vulnerabilities.
Some of these critical and strategic minerals include ones like lithium, graphite, cobalt, titanium and rare earth elements (REE).
India has committed to achieve 50 per cent of cumulative electric power installed capacity from non-fossil sources by 2030. An ambitious plan for energy transition such as this 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, the statement said.
Most of the critical and strategic minerals requirements in India are met only through imports. These also find use across sectors like renewable energy, defence, agriculture, pharmaceutical, high-tech electronics, telecommunications, transport, creation of gigafactories, etc.
In a bid to push for better supplies and ensure private participation in the sector, sweeping changes were made to the MMDR Act earlier this year. The amendments saw 24 minerals being notified as ‘Critical and Strategic’ minerals and confers the Central government the power to grant concession of these minerals (so that Centre can prioritise the auction of these minerals by looking at the requirements of the country).
The revenue generated from these auctions shall accrue to State Governments.
Subsequently, royalty rates of critical minerals have been rationalised to encourage more participation in auctions.
The Government had specified royalty rates for Platinum Group of Metals (PGM) at 4 per cent, Molybdenum at 7.5 per cent, Glauconite and Potash at 2.5 per cent, Lithium at 3 per cent, Niobium at 3 per cent and Rare Earth Elements at 1 per cent.