Centre announces partial reimbursement scheme for exploration of critical minerals

Centre announces partial reimbursement scheme for exploration of critical minerals

The mines ministry on June 24 announced scheme to provide partial reimbursement of exploration expenses for licence holders.

As per the scheme, the government will provide 50 percent reimbursement for exploration of critical minerals with a cap of Rs 20 crore.

Moneycontrol was first to report on June 19 about the critical mineral auction and that the government may announce scheme to partially reimburse exploration expenses of license holders.

Union Minister of Coal and Mines G. Kishan Reddy also launched the 4th tranche of auction of critical and strategic minerals, and declared the preferred bidders for the six blocks put up in auction during the 1st tranche.

Under the 4th tranche of auction, the government included 21 blocks of critical mineral. Out of these 21 blocks, 11 are fresh blocks, spanning six States, Arunachal Pradesh, Chhattisgarh, Jharkhand, Karnataka, Rajasthan and Uttar Pradesh. These blocks contain a variety of minerals including graphite, glauconite, phosphorite, potash, nickel, PGE, phosphate and Rare Earth Elements (REE).

Additionally, as part of this tranche, 10 critical mineral blocks are on offer as the “second attempt” blocks of previous tranches of auction. These 10 blocks are located in Andhra Pradesh, Arunachal Pradesh, Chhattisgarh, Karnataka, Maharashtra and Tamil Nadu and have important critical minerals like tungsten, vanadium, graphite, glauconite, cobalt and nickel.

"Several reforms have taken place in the sector. The metal and mining sector was the sector which gave the highest dividend in FY24 in India. Of the 24 critical minerals announced in 2023, 14 minerals have been auctioned. Slowly, all the critical minerals will be auctioned," said Coal & Mines Secretary V L Kantha Rao.

To date, the Centre has introduced three tranches of auctions, covering 38 critical and strategic mineral blocks across 14 states. However, the first tranche saw a lukewarm response, leading to the cancellation of 13 out of 20 blocks initially offered. Subsequent tranches have seen improved participation, with the second round of six blocks completed as per schedule.

Last year, the ministry officially launched the auction of 20 mineral blocks containing minerals such as lithium, platinum-group elements, graphite, molybdenum, potash, phosphorite, rare earth elements, and glauconite.

These blocks are spread across states including Bihar, Odisha, Uttar Pradesh, Chhattisgarh, Jharkhand, Tamil Nadu, and the union territory of Jammu and Kashmir.