Is Rajasthan Finally Tapping Its Full Mining Potential?

From hosting India’s first-ever potash mines to becoming the top state in the country in terms of major mineral block auctions within a year, Rajasthan is making consistent progress in the mining sector.

This was not the case when the Ashok Gehlot-led Congress government was in power. Rajasthan’s mining sector gained momentum after the Bharatiya Janata Party (BJP) government assumed office in December 2023.

This is evident from several data points. During its five-year tenure, the Congress government auctioned only 34 mineral blocks. In contrast, the BJP government auctioned 49 major mineral blocks within just one year, from February 2024 to January 2025.

Similarly, the state's mining revenue saw an increase of nearly 24 per cent in 2024–25 compared to 2023–24. Mining revenue rose from Rs 7,460 crore in 2023–24 to Rs 9,228 crore in 2024–25.

For 2025–26, Rajasthan’s Department of Mines and Geology (DMG) has set a target of Rs 12,950 crore in revenue collection. These plans are aligned with the Rajasthan Mineral Policy 2024, released in September 2024.

The policy also aims to double the mining sector’s contribution to Rajasthan’s Gross State Domestic Product (GSDP).

In 2023–24, the mining sector contributed 3.4 per cent to Rajasthan’s GSDP. The policy seeks to increase this contribution to 5 per cent by 2029–30, and to 6 to 8 per cent by 2046–47.

What the policy does

Although Rajasthan has been among the top three mineral-producing states in India, along with Odisha and Chhattisgarh, for decades, it is still considered to be mining below its full potential.

To unlock this potential, the policy was introduced to accelerate exploration of both major and minor minerals. Previously, exploration had been slow due to dependence on central and state agencies, which often operate with limited resources.

The new policy proposes strengthening the capacity of the state agency while simultaneously encouraging greater private sector participation in mineral exploration and enhancing the use of technology.

It also recommends expanding the area under mining concession by an additional 1 per cent of the existing concession area each year. This would be achieved through investment in research and development, the use of advanced technologies, and international collaborations.

To attract investment, the policy proposes opening up new areas for investors. These areas have remained unused or underutilised due to administrative and judicial challenges. The policy also seeks to simplify bidding and permitting processes.

Additionally, it places greater emphasis on minor minerals, which already contribute 36 per cent of the state’s total mining revenue, and on critical minerals, in order to prioritise their production.

To meet the rising demand from expanding mining activity, the policy gives precedence to skill development. It also proposes restructuring and strengthening the mining department and combating illegal mining through improved tracking mechanisms.

The potash potential

Within months of the policy’s implementation, Rajasthan is set to host India’s first potash mines. Potash is one of the critical minerals, and its importance lies in the fact that India is entirely reliant on imports for this resource.

Potash is a key agricultural input used in fertilisers. As one of the largest consumers of potash, India imported over Rs 8,000 crore worth of it in 2024–25 alone. The development of domestic potash mining could significantly benefit the national exchequer.

Rajasthan holds over 95 per cent of India’s total potash reserves. These reserves remained untapped until the state took proactive steps to auction more blocks for strategic and critical minerals under the new mining policy.

The policy directs the state to support the central government in identifying and developing potential sites through active exploration, mining, mineral processing, and research and development for strategic and critical minerals.

As a result, the Government of India concluded successful e-auctions for two potash and halite blocks in the Hanumangarh district at the end of May.

Hindustan Zinc Limited (HZL) and Oil India Limited emerged as the preferred bidders for these two blocks. HZL has already received the Letter of Intent from the central government for mining in a block covering over 1,800 hectares.

Responding to the development, Union Mining Minister G. Kishan Reddy stated that by unlocking the potential of potash mining, the country would reduce import dependency and support the backbone of agriculture, namely, the farmers. He emphasised the importance of achieving self-reliance in fertiliser minerals.

Focus on rare earth minerals

The new mining policy recognises that demand for rare earth minerals is projected to double by 2040. Currently, China dominates global production, accounting for nearly 90 per cent of rare earth mineral output. To counter this, India must develop its own domestic production capabilities.

The focus on rare earths, categorised as critical minerals, has enabled Rajasthan to identify significant reserves in Bhati Kheda, located in the Siwana tehsil of Balotra. These reserves are now slated for auction.

Surveys were conducted by the Geological Survey of India (GSI) and the Atomic Minerals Directorate (AMD) in the Jalore and Balotra districts in western Rajasthan. With the G2 level survey completed, it has been confirmed that large deposits of rare earth elements are present.

Although the exact quantities have not been disclosed, the upcoming auction is expected to be valued at Rs 10 crore, according to media reports. Moreover, environmental clearance is anticipated to be straightforward since there are no wildlife areas nearby.

Despite India holding the world’s third-largest reserves of rare earth minerals (6.9 million tonnes), it contributes less than 1 per cent to global production due to limited processing infrastructure.

To support the ceramic and rare earth industries, the new mineral policy proposes establishing a Centre of Excellence. At the national level, the National Critical Mineral Mission has been initiated to fast-track such efforts.

However, while the central government is driving the focus on critical minerals, the state primarily plays a supporting role. Agencies like the GSI are conducting sample analyses across various locations to assess mining feasibility.

Auctions and thereafter

In 2024, Rajasthan became the leading state in India for mineral block auctions and received national recognition with a first prize at the National Mines Ministers' Conference.

This momentum has continued into 2025. Rajasthan has already launched e-auctions for 34 major mineral blocks, with nine auctions completed by 2 July.

Half of these blocks are for limestone mining, used in cement production. Sixteen are composite licence blocks, and one is an iron ore block in Bagawas, Kotputli-Behror.

The composite licence blocks also include critical minerals such as copper, for which India remains heavily import-dependent. Rajasthan possesses more than half of India’s copper reserves, with most of the auctioned copper blocks located in the Bhilwara district.

However, auctioning is only one step. Operationalising these blocks is a separate challenge. Typically, it takes three to four years to begin mining major minerals and one to two years for minor minerals.

This is why none of the blocks auctioned under the Bhajan Lal Sharma government have become operational yet. To address this, the new policy includes a post-auction facilitation mechanism.

A meeting was held on 16 July in Jaipur with stakeholders from the revenue, environment, mines and geology departments, and the Indian Bureau of Mines (IBM), aimed at resolving pending issues.

The operationalisation

The primary challenge in operationalising mines lies in coordination among departments, especially given the need for sustainable mining practices, technological upgrades, and faster exploration of critical minerals.

Environmental factors such as forest and pasture land diversion and the requirement for environmental clearances after impact assessments, along with regulatory delays like mining plan approvals and legal permissions, contribute to these delays.

Recognising the issue, Chief Minister Sharma directed a joint meeting to expedite the process, signalling the state government’s commitment to both auctioning and operationalising mines.

“Quick operationalisation can lead to faster development, attract investment, and generate employment. A meeting was held to help applicants obtain all pollution and environment-related clearances,” said DMG Director Deepak Tanwar in an interview with Swarajya.

He noted that over 20 per cent of India’s auctioned mines are in Rajasthan. “Out of 500 mines auctioned nationally, 106 are in Rajasthan. While many are operational, some are awaiting mining plan approval from IBM, while others require different clearances,” he explained.

Tanwar expressed confidence that five newly auctioned mines are close to operationalisation, and that they aim to operationalise another 10 to 12 by the end of the financial year, taking the total to 20.

However, with the post-auction support cell still in its early stages and the Rajasthan State Industrial Development and Investment Corporation Limited (RIICO) selling industrial land at high prices, delays in operationalisation may persist.

The misses

Although the new policy pledges to safeguard the welfare, health, and safety of mine workers and their families, the reality is different. People living within a 30 kilometre radius of mines often suffer from bronchitis and even lung cancer.

Due to a lack of awareness, many mistake these conditions for common fever or tuberculosis and do not receive proper treatment. The government has yet to implement preventive or curative healthcare solutions or take sufficient steps to protect workers from exploitation.

Another concern is that a substantial share of minerals mined in Rajasthan is not processed within the state. Instead, they are sent to other states such as Gujarat. This is largely due to more competitive electricity tariffs and industrial land prices elsewhere.

“There is no water for industries in the Marwar region, and sewage water is wasted. Also, industrial gas is unavailable. RIICO charges land prices that are ten times higher than market rates. These issues force industries to look elsewhere,” said Deepesh Gulgulia, a Rajasthan policy observer, in an interview with Swarajya.

He revealed that DP World had proposed building a dry port in Marwar, but withdrew after being quoted Rs 68–70 crore for 75 hectares of land by RIICO. He contended that such policies are deterring investment in Rajasthan.

Gulgulia also cited examples of underexploited resources. For instance, Feldspar is abundant in Beawar and is widely used in ceramics and glassmaking. Rajasthan holds three-fourths of India’s Feldspar reserves, yet some quantity is still imported.

High-quality granite is another example. Found in abundance in Jaisalmer, it remains under-mined due to poor transportation infrastructure.

Action against illegal mining

Despite these shortcomings, Rajasthan has taken concrete steps to combat illegal mining. The number of First Information Reports (FIRs) filed and fines imposed for illegal activities have increased.

The mining department has adopted a zero-tolerance policy and introduced daily revenue monitoring systems. These measures have helped improve revenue collection.

While minerals that require advanced processing are less susceptible to illegal mining, materials such as sand, gravel, and masonry stone are frequently extracted illegally, prompting criticism from the opposition.

To curb this, the government has started using technologies including drone surveillance, GPS vehicle tracking, geo-fencing, and Radio Frequency Identification (RFID) at checkpoints to monitor mineral transport. However, widespread implementation is still pending.

Chief Minister Sharma has tasked District Magistrates with controlling illegal mining in their respective areas. A joint task force involving police, administration, and mining officials has also been formed.

Districts such as Bhilwara, Chittorgarh, Jaipur, Rajsamand, Kota, Tonk, Nagaur, Sawai Madhopur, Deeg, and Kotputli have been key focus areas, where regular campaigns lasting five to seven days are conducted to curb illegal activity.

The government has also streamlined the process for extending thousands of minor mineral and quarry leases through online applications and deadline extensions, in a bid to maximise revenue and reduce illegal operations.

The political focus

The remarkable progress in Rajasthan’s mining sector compared to the Congress era can be attributed to the BJP government's emphasis on the sector. More specifically, it reflects the coordinated effort of the so-called double-engine government, as the central government has also prioritised mining amid global supply chain challenges.

This emphasis is evident from Chief Minister Sharma's decision to retain the mines and petroleum portfolio and appoint T. Ravikanth, a trusted officer, as Principal Secretary to the department shortly after taking office.

While these efforts are already yielding early results, Rajasthan still has significant ground to cover, especially in improving the ease of doing business in the mining sector and fully harnessing untapped reserves through infrastructure upgrades.

The BJP’s 2023 election manifesto had promised to turn Rajasthan into an electric vehicle (EV) manufacturing hub by mining lithium and potash. While potash mines have been auctioned, lithium reserves have yet to be confirmed.

Another pledge was to create a rare earth metal theme park. However, rare earth mineral mining is yet to begin in the state.

Challenges exist at every stage, from discovering suitable minerals and proving their mining viability, to successful auctioning and operationalisation. Perhaps the biggest hurdle lies in developing the capacity to process these minerals within the state.

An ambitious target has been set to achieve Rs 1 lakh crore in mining revenue by 2047. To meet this goal, annual revenue would need to grow by 25 per cent each year. This will only be possible if Rajasthan fully realises its mining potential.