India unveils historic auction for exploration licenses opening doors for critical mineral wealth

In a landmark move to revolutionize India’s mineral exploration sector, the Ministry of Mines has launched the country’s first-ever auction under the new exploration license (EL) regime.

The announcement, made on March 13 in Goa, introduces 13 exploration blocks across 10 states, offering potential investors access to valuable deposits of critical and deep-seated minerals, including gold, copper, diamonds, zinc, rare earth elements (REE), vanadium, and zirconium. These resources are crucial to industries ranging from electronics and renewable energy to defense and aerospace.

This move comes five months after India’s Mines Ministry took charge of exploration license auctions, following delays by state governments. The new auction process offers private companies an opportunity to explore vast areas and secure long-term revenue from any viable mineral discoveries, with potential earnings stretching over 50 years.

Mines Secretary V L Kantha Rao elaborated on the significance of the initiative, stating, “We are introducing a model similar to foreign nations where private companies explore on their own terms, with the benefit of any discovered resources leading to sustained financial rewards.”

Among the 13 blocks on offer, Chhattisgarh, Jharkhand, and Maharashtra stand out with two blocks each. States like Andhra Pradesh, Arunachal Pradesh, Gujarat, Karnataka, Madhya Pradesh, Rajasthan, and Uttar Pradesh feature one block each, showcasing a diverse range of critical minerals awaiting exploration.

While India has previously auctioned only 24 critical mineral blocks—many of which were annulled due to a lack of investor interest—this new initiative aims to boost the country’s exploration capabilities. It will provide invaluable data on mineral reserves, driving greater participation in future auctions. Union Mines Minister G Kishan Reddy expressed confidence in the auction process, stating, “This systematic, transparent approach will accelerate the discovery of critical minerals and support India’s goals of a self-reliant, future-ready mineral ecosystem aligned with clean energy and industrial ambitions.”

The EL regime, introduced after an amendment to the Mines and Minerals (Development and Regulation) Act in August 2023, seeks to attract junior mining companies and encourage private exploration.

Under this system, license holders will explore the blocks, and if viable mineral reserves are identified, the blocks will then be auctioned off for mining licenses. The process is designed to be fair, with a reverse-bidding mechanism that awards blocks to those quoting the lowest percentage share of the eventual mining premium.

To mitigate the risks for private explorers, the government has also rolled out a reimbursement scheme through the National Mineral Exploration Trust (NMET), which will cover up to 50% of eligible expenses for exploration activities, capped at Rs 20 crore.

The Ministry of Mines stepped in after only six of the 14 state governments that initially allocated EL blocks took action on their own auctions. To address this fragmentation and lack of response, the ministry has now centralized the process, ensuring timely and coordinated auctions to meet the nation’s growing demand for critical and strategic minerals.

Additionally, the government is ramping up exploration efforts through public agencies, with a budget allocation of Rs 3,000 crore for NMET and Rs 4,000 crore for the Geological Survey of India (GSI).

The National Critical Minerals Mission aims to carry out 1,200 critical mineral exploration projects by 2030, further strengthening India’s mineral base and positioning the country as a leader in clean energy and industrial growth.

This bold step represents a turning point in India's mineral exploration sector, paving the way for sustained economic development, energy independence, and technological advancement in the years ahead.