India launches first exploration licence auctions, 13 critical and deep-seated mineral blocks up for grabs

“The way in foreign countries private companies go and do exploration on their own, and then get benefit out of that exploration, we are introducing that concept here. We give you some thousand square kilometers and you, as a private company, will go and do exploration. If you find that some critical or deep-seated mineral is available there, then you can get income for the next 50 years on the basis of your discovery,” Mines Secretary V L Kantha Rao said at the auction launch in Goa.

Of the 13 blocks up for auction, Chhattisgarh (diamond), Jharkhand (gold and copper), and Maharashtra (tantalum and zinc) have two each, while Andhra Pradesh (REEs), Arunachal Pradesh (zinc), Gujarat (vanadium), Karnataka (gold and copper), Madhya Pradesh (platinum-group elements), Rajasthan (REEs), and Uttar Pradesh (zirconium) have one each.

A boost in the exploration of critical minerals will provide potential investors with key data on reserves, which in turn will increase interest and participation in auctions. So far, only 24 critical mineral blocks have been auctioned off, and many auctions were annulled due to insufficient investor interest.

On the EL auctions launch, Union Mines Minister G Kishan Reddy said, “For the first time, India is opening up systematic early-stage exploration through a structured and transparent auction process. This reform will accelerate the discovery of critical and deep-seated minerals, boost investor confidence, and pave the way for a self-reliant, future-ready mineral ecosystem aligned with India’s clean energy and industrial ambitions.”

To encourage private exploration, the Mines and Minerals (Development and Regulation) Act was amended in August 2023 to introduce the EL regime, aiming to attract junior mining companies.

Under the EL regime, licence holders will explore these blocks, and if viable mineral reserves are found, the blocks will be auctioned for a mining licence (ML). The EL auction process follows a reverse bidding mechanism, where the block is awarded to the bidder quoting the lowest percentage share of the auction premium payable by the eventual ML holder.

To partially offset risks for private explorers, the National Mineral Exploration Trust (NMET) had launched a reimbursement scheme in June 2024, covering up to 50 per cent of eligible expenses – capped at Rs 20 crore – for activities such as geophysical investigations, exploratory drilling, and chemical and petrological analysis.

The mines ministry took over EL auctions in October last year after only six out of 14 state governments that were handed over blocks for EL initiated the auction process.

“Any delay in auction of exploration licence blocks containing such critical and strategic minerals have impact on the starting exploration and production of these minerals and resultant availability of these minerals in the country. Timely action is required to support the country’s goal of achieving Atmanirbharta in critical and strategic minerals,” the ministry had noted in an order.

“Fragmented and uncoordinated auction of exploration licence blocks by different State Governments may have resulted in lack of response in the auction of exploration licence blocks by the State Governments… a centralised auction may address the issues regarding lack of response in the auction of exploration licence blocks,” it said.

The mines ministry is also boosting exploration activities under government agencies. With Rs 3,000 crore budgeted for the National Mineral Exploration Trust (NMET) and Rs 4,000 crore for the Geological Survey of India (GSI), the National Critical Minerals Mission targets 1,200 domestic critical mineral exploration projects till 2030-31.