Government Accelerates Critical Mineral Exploration

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The ministry of mines has officially launched the first tranche of exploration license (EL) auctions, five months after amending regulations to take charge of the process from state governments. This initiative aims to reduce India’s dependence on mineral imports and unlock the country’s vast reserves of critical and deep-seated minerals.

Key Mineral Blocks Up for Auction

The first auction tranche includes 13 blocks across 10 states, covering minerals essential for industries such as electronics, renewable energy, defence, and aerospace. These minerals include:

  • Gold and Copper – Karnataka, Jharkhand
  • Diamonds – Chhattisgarh
  • Rare Earth Elements (REEs) – Andhra Pradesh, Rajasthan
  • Vanadium – Gujarat
  • Zinc – Arunachal Pradesh, Maharashtra
  • Tantalum – Maharashtra
  • Platinum-Group Elements – Madhya Pradesh
  • Zirconium – Uttar Pradesh

Mines Secretary V.L. Kantha Rao said, “We are introducing a system where private companies explore large areas, identify critical minerals, and secure long-term financial benefits from their discoveries”.

Boosting Investor Confidence in Exploration

With only 24 critical mineral blocks auctioned so far and several annulled due to low investor interest, the government aims to attract private players by providing comprehensive exploration data. The structured and transparent auction process is expected to increase participation.

Union mines minister G. Kishan Reddy added, “For the first time, India is systematically opening up early-stage exploration through a structured auction process. This initiative will accelerate mineral discovery, boost investor confidence, and support India’s clean energy and industrial ambitions.”.

New Incentives for Private Explorers

To encourage private sector participation, the government amended the Mines and Minerals (Development and Regulation) Act in August 2023, introducing the EL regime. Under this system:

  • Licence holders explore assigned blocks and, if they confirm viable mineral reserves, the blocks are then auctioned for mining licenses (MLs).
  • The auction follows a reverse bidding mechanism, awarding blocks to the bidder offering the lowest share of auction premiums payable by the eventual ML holder.
  • To offset financial risks, the National Mineral Exploration Trust (NMET) launched a reimbursement scheme in June 2024, covering up to 50% of eligible expenses (capped at ₹20 crore) for activities such as:
  • Geophysical investigations
  • Exploratory drilling
  • Chemical and petrological analysis

Centralized Auction Process for Faster Execution

Initially, state governments were responsible for conducting EL auctions, but only six out of 14 states initiated the process. In response, the Ministry of Mines took over in October 2024 to streamline and accelerate the process.

The government is also strengthening mineral exploration under public agencies. Key initiatives include:

  • ₹3,000 crore allocated to the National Mineral Exploration Trust (NMET)
  • ₹4,000 crore set aside for the Geological Survey of India (GSI)
  • National Critical Minerals Mission targeting 1,200 domestic exploration projects by 2030-31

As reported by indianexpress.com, these measures aim to establish a self-reliant mineral ecosystem. This will ensure long-term supply security for critical industries.