Karnataka, Rajasthan launch auction for exploration license for critical, deep seated minerals

The Union mines ministry on February 29 launched 18 critical and strategic mineral blocks in the second tranche of an auction.

Karnataka and Rajasthan launched India's first ever auction of Exploration Licence (EL) for critical and deep seated minerals on March 6, the ministry of mines said.

Karnataka launched the auction of one block of gold, copper and lithium while Rajasthan launched auction of three blocks of rare earth elements, rare metal and potash minerals, the ministry said in a statement on March 7.

Exploration licence blocks are being auctioned for the first time in the country amid central government's push to strengthen the domestic supply of raw materials required to support its shift to green energy.

The licence holder will explore the blocks and identify the areas that can be auctioned for mining lease. The blocks explored by the licence holder can be directly auctioned for mining lease, which will fetch better revenue to the state governments, according to the ministry.

So far, the ministry has handed over 20 blocks to states including Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Telangana, Uttar Pradesh and Union Territories of Jammu & Kashmir and Ladakh for the auction of exploration licenses.

The 20 blocks consists of minerals such as Tin, Tungsten, Rare Earth Elements, Vanadium, Diamond, Copper, Zinc, Lithium, PGE, Potash and Zirconium, the ministry said.

Preferred bidder in the auction of licence shall be selected through reverse bidding. The bidders will quote the share they will take in auction premium payable by the mining lease (ML) holder of the blocks explored by them. The bidder quoting lowest percentage bid shall be preferred bidder for exploration licence.

Last week, Mines Secretary VL Kantha Rao flagged that five states have showed readiness to do the first auction of exploration license.

The Union mines ministry on February 29 launched 18 critical and strategic mineral blocks in the second tranche of an auction, with the resources being valued at about Rs 30 lakh crore.