After setbacks, more exploration of J&K lithium block likely before another auction

“Critical Minerals are auctioned in the country for the first time. Like any other auction, in auction of critical minerals also, required number of response may or may not be received,” the Mines Ministry said when sought for comments. “With respect to Lithium block in Union Territory of Jammu & Kashmir, ministry is examining whether further exploration is required,” it said.

“We have started exploration work in J&K where GSI (Geological Survey of India) identified lithium deposits in collaboration with the J&K government. As soon as possible, we will complete the exploration and auction it to start work on mining lithium with full force,” Union Minister of Coal and Mines G Kishan Reddy told the Rajya Sabha on July 22. Lithium is a critical mineral that is used extensively in electric vehicle (EV) batteries, energy storage systems, and consumer electronics. The first auction for the J&K lithium block for a composite licence (CL), which was launched in November last year, was annulled after less than three bidders qualified the technical bids round. A CL is a prospecting licence-cum-mining lease, which is a two-stage concession for the purpose of undertaking prospecting operations followed by mining operations.

On March 14, the ministry invited bids in a second attempt at auctioning off the block without any changes in the bid document. According to the Mineral (Auction) Rules, 2015, amended many times since, if a block being auctioned fails to secure the participation of at least three technically qualified bidders, it can be put on auction again as a second attempt. For such auctions, the rules require bidding to “continue to the second round even in case the number of technically qualified bidders is less than three”. They also require the reserve price in the second attempt to be the “highest initial price offer of the technically qualified bidders if any in the first annulled attempt,” which in the case of the Reasi lithium block was 11.25 per cent.

According to a document with the ministry, prospective bidders during the first attempt had sent queries ranging from the bid document having limited information on the block to the size of the block being too small “to apply modern mineral systems-based tools and look at areas where larger alteration haloes or deposit traps might exist”. Another asked if any beneficiation study had been conducted to assess the feasibility of extracting and processing lithium from the resources identified in J&K, to which the ministry replied in the negative. The first auction of the J&K lithium block was part of the ministry’s first tranche of critical mineral auction, which also included a lithium block in Katghora in Chhattisgarh’s Korba district that was awarded to Kolkata-based Maiki South Mining Pvt Ltd on June 24 for an auction premium of 76.05 per cent.

Last month, The Indian Express had reported that India’s plans to develop domestic mining of lithium made progress in Korba district with the successful auction of one block and promising exploration results from other nearby blocks.