India Plans Advance-Level Exploration Of Critical Mineral Blocks Before Auctions To Build Investor Confidence: Report

The government is planning to intensify advance-level exploration of critical mineral blocks before auctioning them, a strategic shift designed to bolster investor confidence following tepid responses from miners across recent auction rounds, Business Standard reported.

The Mines Ministry is working towards ensuring advanced G2-level exploration is completed before critical mineral blocks are offered for sale, a senior official was cited by media reports.

The move comes against the backdrop of significant cancellations across multiple auction tranches.

In the fourth round alone, the government cancelled auctions of 11 critical mineral blocks due to poor response, with four blocks receiving no bids whatsoever.

The pattern has persisted across successive rounds, with only 24 of 48 blocks successfully auctioned between 2020 and 2023, translating to a success rate below 50 per cent.

Experts say that investors remain hesitant to commit to mining projects without adequate data, as these ventures involve substantial time and capital with higher failure probabilities than success.

The lack of detailed resource information has hampered India's ambitious plans to achieve self-sufficiency in critical minerals essential for green energy technologies and semiconductor manufacturing.

To address these concerns, the government is also planning to launch a single-window clearance portal for mining projects by December, which will expedite project execution including critical minerals.

Under the United Nations Framework for Classification of Resources, G2-level exploration represents general exploration that provides sufficient resource clarity to enable immediate mining by successful bidders, compared to earlier reconnaissance or prospecting stages.

The initiative forms part of India's broader National Critical Mineral Mission, which aims to secure the nation's critical mineral needs through increased domestic production and strategic overseas acquisitions.

Since launching critical mineral auctions in late 2023, the ministry has completed five tranches covering 55 blocks across multiple states, though only 34 blocks have been successfully auctioned.

Critical minerals including lithium, cobalt, rare earth elements and copper are vital for electric vehicle batteries, renewable energy technologies and electronics manufacturing.

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