Karnataka and Rajasthan Kick Off Auctions for Exploration Licences of Critical Minerals

Karnataka and Rajasthan have started the auction process for Exploration Licences (EL) for important and deep-seated minerals. This marks the first time in the country that EL blocks are up for auction. Andhra Pradesh, Chhattisgarh, Madhya Pradesh, and Maharashtra are also expected to join the auction for EL in the upcoming days.

In Karnataka, the auction is for a block that is likely to have Gold, Copper, and Lithium. Rajasthan, on the other hand, is auctioning three blocks containing Rare Earth Elements, Rare Metal, and Potash minerals, according to an official statement.


The Exploration Licence holder will explore these blocks and identify areas suitable for Mining Lease auctions. The explored blocks can then be directly auctioned for Mining Lease. The preferred bidder for the Exploration Licence will be selected through reverse bidding. Bidders will quote the share they want in the auction premium paid by the mining lease holder of the explored blocks. The bidder with the lowest percentage bid will be the preferred bidder for the exploration licence.

Mining for critical and deep-seated minerals like Cobalt, Lithium, Nickel, Gold, Silver, and Copper is more challenging compared to extracting surficial or bulk minerals. The Exploration Licence, granted through auction, allows the licensee to conduct reconnaissance and prospecting operations for these crucial minerals.

The Mines and Minerals (Development and Regulation) Act, 1957 was amended in September 2023 to introduce the new mineral concession of Exploration Licence for 29 critical and deep-seated minerals.

It is anticipated that Junior Mining Companies will bring in global expertise in acquiring, processing, and interpreting exploration data. They will leverage their risk-taking ability to discover deposits of deep-seated minerals by adopting the latest technologies and expertise.

Earlier this year, the central government allocated 20 blocks of EL to various states and Union Territories for minerals like Tin, Tungsten, Rare Earth Elements, Vanadium, Diamond, Copper, Zinc, Lithium, Platinum Group Elements (PGE), Potash, and Zirconium.

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