The Ministry of Mines has directed the Geological Survey of India (GSI) to conduct a re-exploration of the 5.9 million tonnes of lithium block in Jammu and Kashmir’s (J&K’s) Reasi district after repeated setbacks to put the reserve up for auction again in six months.
The aim is to reach at least the G2 level of exploration before putting the Salal-Haimna Lithium, Titanium, and Bauxite (Aluminous Laterite) Block up for auction again.
The previous auction, which opened on November 29, 2023, at the G3 level of exploration, failed to attract the minimum three bidders required to proceed to the financial bidding round. Even a second attempt, where a single bidder could have been awarded the block, saw no success.
Industry players have shown reluctance to participate due to insufficient exploration data.
The ministry now plans to complete the re-exploration within six months, hoping this time to generate more interest.
“GSI has been asked to start re-exploration in the area. We are planning to put the block again for auction in six months,” a senior government official told Business Standard.
A query sent to the Ministry of Mines remained unanswered till the time of going to press.
The decision to offer the block under a composite licence (CL) again, or switch to a mining lease (ML), will depend on the outcome of GSI’s exploration efforts, said another official.
According to the United Nations Framework for Classification of Resources, mineral exploration is divided into four stages: G4 (reconnaissance), G3 (prospecting), G2 (general exploration), and G1 (detailed exploration).
Generally, G1 and G2 levels are suited for MLs, allowing licence holders to directly undertake mining, while CL holders engage in both prospecting and mining.
The re-exploration push is aimed at improving the block’s appeal, as sector experts note that the lack of detailed exploration reports was a key deterrent for potential bidders.
However, experts caution against rushing the process, which they estimate could take around two years.
“Government wants to rush and come for auctioning again, but detailed exploration takes time.
"Rushing the process could result in another setback like the previous one,” said a sector expert, requesting anonymity.
An industry executive also emphasised the need for detailed exploration before re-auctioning the block.
“If the government is serious about lithium mining, it should complete G1 or G2 level exploration and then offer the block for mining.
"Without clarity on the lithium reserves, industry players might refrain from participating again,” the executive said.
India currently meets its lithium demand entirely through imports, with imports of lithium-ion (Li-ion) batteries reaching $2.9 billion in 2023-24, mostly from Hong Kong and China, according to Ministry of Commerce data.
While the Chhattisgarh lithium block awarded to Maiki South Mining remains the only successful lithium auction in the country, its resource size is less than one-tenth of the block in J&K.
In its bid to reduce dependence on imports and support its energy transition targets, India has been exploring domestic and international lithium sources.
Beyond J&K and Chhattisgarh, India has partnered with Argentina for lithium exploration and is evaluating opportunities in Australia, Chile, and Bolivia.
Lithium is crucial for India’s shift to cleaner energy and its goal of reaching net-zero carbon emissions by 2070.
Globally, out of 98 million tonnes of lithium resources, only 26 million tonnes are categorised as reserves (ready for use).
About 70 per cent of these reserves are concentrated in Chile (36 per cent), Australia (24 per cent), and Argentina (10 per cent), according to a report by Ficci on new-age energy minerals.
Lithium story timeline
- Auction opened on November 29, 2023, at G3 level but failed to attract the required three bidders
- A second attempt, where a single bid could have succeeded, also failed
- Industry's reluctance due to insufficient exploration data
- The ministry now aims to reach G2 level of exploration within six months
- Experts say detailed exploration could take 2 years and warn that rushing the process could lead to another auction setback
- India’s lithium demand is met entirely through imports, with $2.9 billion spent on Li-ion battery imports in 2023-24, mostly from Hong Kong and China
- Out of 98 million tonnes of global lithium resources, only 26 million tonnes are classified as reserves. They are mostly in Chile, Australia, and Argentina
