The maiden, critical mineral auction in India has failed to enthuse the mining industry, with the first tranche achieving less than a 50 per cent success rate and the auction of several mines was cancelled owing to low response.
The results, announced by the Ministry of Mines on Monday, showed that six lesser-known companies emerged as preferred bidders.
Among these were Agrasen Sponge, Kundan Gold Mines, Dalmia Bharat Refractories, Sagar Stone Industries, and Maiki South Mining.
Union Minister for Coal and Mines G Kishan Reddy announced the results and launched the fourth round of auction of critical and strategic minerals in which 21 blocks have been put on sale.
“This round of auction is a step towards self-sufficiency in the critical minerals sector,” Reddy said during the launch event in New Delhi.
The auction, by the Centre, is intended to boost the domestic production of crucial minerals and reduce dependence on import.
However, the absence of major players has raised questions about the attractiveness and feasibility of the blocks offered.
“The lacklustre response is due to the lack of clarity on the potential data of the reserves.
"Nobody wants to invest when there is no data available on the reserves.
"Whether these companies have the capability to mine is a big question now.
"These companies may also fail to do mining,” an industry player said.
The development comes days after the ministry cancelled the auction for 14 of the 18 blocks of critical minerals launched in the second tranche on February 29.
According to a Mines Ministry notice dated June 21, five of the 14 blocks cancelled did not receive any bidders, while nine got fewer than the mandatory minimum of three bidders.
This is not the first time the Centre has cancelled an auction due to limited interest from bidders; in the first tranche, the ministry had to cancel 14 of the 20 blocks put up for auctioning.
The six blocks announced include deposits of graphite, manganese, phosphorite, lithium, and rare earth elements located in Odisha, Tamil Nadu, Uttar Pradesh, and Chhattisgarh.
The highest auction premium of 400 per cent was for Uttar Pradesh’s phosphorite block, awarded to Sagar Stone.
The lithium block of Chhattisgarh was awarded to the Maiki South Mining at an auction premium of 76.05 per cent.
An auction premium refers to the additional financial commitment that a bidder agrees to pay over and above a predetermined base price or reserve price set by the government or the auctioning authority.
This premium is typically expressed as a percentage of the mineral revenue generated from mining operations.
The ministry handed over the certificates to two newly notified private exploration agencies (NPEAs) in the programme.
With the notification of these two private agencies, the number of NPEAs has increased to 22.
Till now, 31 projects for different commodities have been taken by the NPEAs from National Mineral Exploration Trust (NMET) funds, amounting to approximately Rs 35.23 crore.
The minister handed over the sanction letters of grant of funds to research and development (R&D) institutes and startups.
The Ministry of Mines has allocated Rs 12 crore for R&D projects and Rs 20 crore for science and technology programme in 2024-25.
The ministry also announced a scheme for partially reimbursing exploration expenses of the exploration-licence holders.
Under the scheme, exploration expenditure of up to 50 per cent of the cost, subject to various component-wise limits, will be reimbursed.
The concept of “exploration licence” was introduced through an amendment to the Mines and Minerals (Development and Regulation) in 2023.
A total of 20 blocks for exploration licence were handed over to Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Telangana, Uttar Pradesh, and the Union Territories of Jammu & Kashmir and Ladakh.
