The Union cabinet has approved the amendment in the Mines and Minerals (Development and Regulation) (MMDR) Act, clearing the way for private sector participation in commercial mining of lithium and five other minerals.

These minerals — lithium, beryllium, titanium, niobium, tantalum and zirconium — have strategic significance for India's energy transition.

The amendment removes these minerals from the atomic minerals list and allows the central government to auction mineral concessions for undertaking exploration starting from reconnaissance to prospecting operations.

Notably, all the six minerals are part of the 'Critical Mineral List' released by the Centre on 28 June.

The list of 30 critical minerals was identified in a report titled "Report of the Committee on Identification of Critical Minerals" prepared by an expert team constituted by the Ministry of Mines last November.

The government is likely to move the proposed amendment in the forthcoming monsoon session of Parliament.

Lithium Criticality

Also referred to as “white gold”, lithium is a non-ferrous metal and is used in rechargeable batteries, which power not only laptops and mobile phones but also electric vehicles (EVs) — a crucial part of the world’s plan to tackle climate change.

Lithium-ion batteries offer a longer life cycle as compared to traditional lead-acid batteries.

However, the main reason for their high adoption in EVs is their high energy density. High energy density allows lithium-ion batteries to store more energy in less weight/volume, which is an ideal requirement for e-mobility applications.

In a major achievement, the Ministry of Mines in February 2023 had announced that the Geological Survey of India (GSI) had established “lithium inferred resources” — calculated on the basis of physical and chemical study of the surface and samples — in Salal-Hamima area of Reasi District of Jammu and Kashmir.

The resources to the tune of 5.9 million tonnes (MT) have been established as part of the “Reasi Sersandu-Kherikot-Rahotkot-Darabi” mineral block, where prospecting has been ongoing since 2021-22.

The Centre has asked the Jammu and Kashmir administration to start the auction of Lithium reserves found in Reasi, by December this year.

The ministry is currently in the process of determining the reserve price, also known as the average selling price, for these reserves. Further, the Jammu and Kashmir administration is also in the process of appointing a transaction advisor.

The transaction advisor will offer suggestions to the government on the procedure and method of auction besides preparing the model bid document.

Further exploration activities for searching additional lithium sources is already underway in the Salal Hamima region in Jammu.

Also Read: Centre Unveils List Of 30 Critical Minerals: Here's Exploring The What, Why, And How Of First Such Exercise

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