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Dated: 15.03.2025

Centralized Critical Mineral Auction Policy of Govt of India

India’s Centralized Mineral Auctions 2025: Transforming Mining & Investment

Introduction

India’s mineral sector is undergoing a significant transformation with the Government of India centralizing the auction process for mineral exploration and mining leases. This move, driven by the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) and the 2023 amendments, aims to increase efficiency, transparency, and investor participation.

With over 70 critical mineral blocks up for auction in 2025, including Lithium, Graphite, Rare Earth Elements (REEs), and Tungsten, this initiative is set to boost domestic production, reduce import dependency, and attract foreign investment.

Why Centralized Mineral Auctions?

1. Addressing State-Level Auction Delays

• The Geological Survey of India (GSI) handed over 20 mineral blocks to 14 State Governments for auctions in January 2024.
• However, only 6 out of 14 States initiated auctions for 12 blocks, leading to significant delays.
• This fragmented system created inefficiencies and discouraged participation from global mining companies.

2. Increasing Global & Domestic Participation

• Earlier, each State conducted separate auctions, forcing global exploration companies to navigate different state regulations.
• The Central Government’s decision to centralize mineral auctions simplifies the process, making it more attractive for international and domestic investors.

3. Reducing India’s Dependence on Imported Minerals

• India imports over 80% of critical minerals, including:
  • Lithium (essential for electric vehicle batteries)
  • Cobalt & Nickel (used in renewable energy and aerospace)
  • Rare Earth Elements (REEs) (used in electronics and defense technologies)
• The centralized auctions aim to accelerate domestic mineral exploration and secure raw materials for India’s strategic industries.

4. National Critical Mineral Mission (2024)

• The Union Budget 2024-25 introduced the National Critical Mineral Mission to:
• Promote self-reliance in critical minerals
• Boost domestic exploration & production
• Enhance global competitiveness
• Support India’s clean energy & net-zero goals

5. Government Incentives for Mining & Exploration

• Exploring deep-seated minerals is capital-intensive and risky.
• To encourage private sector investment, the National Mineral Exploration Trust (NMET) launched a financial support scheme:
  • Up to 50% of exploration expenses (₹20 crore per project) will be reimbursed.
  • Additional incentives for early-stage exploration.

Key Mineral Blocks Under Auction in 2025

The Ministry of Mines and State Governments are auctioning a diverse set of mineral blocks across multiple states.

1. Critical & Strategic Mineral Blocks (Central Government Auctions)

Block Name	Minerals	Type of Concession	State
Oranga-Revatipur	Graphite & Vanadium	Mining Lease	Chhattisgarh
Katesar-Guneri	Glauconite	Composite License	Gujarat
Salepali	Graphite	Composite License	Odisha
Khobna & Agargaon	Tungsten	Mining Lease	Maharashtra
Mincheri	Rare Earth Elements (REE)	Composite License	Karnataka
Surajpura	Phosphorite	Composite License	Madhya Pradesh

How the Centralized Auction Process Works

1. Central Government Conducts Auctions

• Under Section 20A of the MMDR Act, the Ministry of Mines is now responsible for auctioning exploration licenses.
• State Governments will still issue final licenses, but the process will be managed centrally.

2. Single E-Auction Portal

• The government has integrated all mineral auctions on the MSTC e-Auction Portal.
• This ensures transparency, efficiency, and easier participation for investors.

3. Exploration License Holders Get Royalties

• After exploration, the blocks will be auctioned for mining leases.
• The original exploration license holder will receive a share of the future mining auction premium.

4. Offshore Mining Opportunities

• India is also expanding into offshore mineral exploration in the Exclusive Economic Zone (EEZ).
• Key offshore mineral blocks include:
  • West Sewell Ridge (Polymetallic Nodules & Crusts)
  • Porbandar Lime Mud
  • Kollam Construction Sand

Investment Opportunities & Benefits

1. Faster Exploration & Mining Lease Allocation

• The streamlined auction process will reduce delays and enable quicker access to mineral reserves.

2. Attracting Global Investors

• Easier participation for international mining companies due to a uniform auction process.
• Foreign investors will benefit from financial incentives and better clarity on regulatory processes.

3. Boosting India’s Renewable Energy & EV Industry

• Lithium, Nickel, Graphite, and REEs are critical for:
  • Electric Vehicle (EV) battery production
  • Solar panels & wind energy infrastructure
  • Battery storage systems
• India’s domestic mineral production will strengthen its clean energy transition.

4. Strengthening India’s Global Mineral Supply Chain

• India aims to become a key supplier of critical minerals in global markets.
• Potential economic boost through exporting processed minerals.

How to Participate in the Auctions

Interested companies can participate in the auction process through:

• MSTC e-Auction Portal: Click Here
• Ministry of Mines Website: Click Here

Steps to Register for Auctions

1️. Company Registration: Register under Companies Act, 2013.
2️. Pre-Bid Qualification: Meet financial and technical eligibility criteria.
3️. Auction Participation: Bid through the MSTC e-auction portal.
4️. Winning Bidder Awarded Exploration or Mining Lease.

Government of India Revises Offshore Mineral Pricing

Introduction

The Ministry of Mines, Government of India, has announced new amendments to the First Schedule of the Offshore Areas Mineral (Development and Regulation) Act, 2002 (OAMDR Act, 2002). Published on October 29, 2024, the amendments aim to revise pricing models for offshore minerals, including construction sand, dolomite, limestone, polymetallic nodules, and overburden waste.

The revised pricing mechanism is designed to:

• Enhance transparency in mineral pricing.
• Align with global best practices for offshore mining.
• Ensure fair revenue generation from India’s offshore mineral resources.

This blog provides a detailed analysis of the pricing changes, their impact on stakeholders, and what this means for India’s offshore mining sector.

Key Amendments in Offshore Mineral Pricing

The notification introduces multiple changes, including updated pricing structures and terminology revisions for offshore minerals.

1. Revised Pricing for Key Offshore Minerals

The amended pricing structure, as per the government notification, is as follows:

Mineral	Revised Price (Per Tonne)
Construction Sand	₹40
Dolomite	₹50
Limestone & Lime Mud	₹50
Overburden/Waste	₹10

Implication: The revised floor prices ensure offshore mineral auctions are fairly priced, preventing undervaluation and increasing government revenue.

2. Introduction of New Pricing Model for Polymetallic Nodules

• The government has introduced a percentage-based royalty model for polymetallic nodules and crusts.
• Royalty Rate: 3% of the average sale price (ad valorem basis).

Implication: This change aligns India’s offshore mineral royalty structure with international practices, ensuring proportional revenue generation based on market-driven pricing.

3. Standardization of “Average Sale Price” Instead of “Sale Price”

• The term “sale price” is replaced with “average sale price” in the pricing mechanism for multiple offshore minerals.
• This change applies to:
  • Dolomite
  • Limestone & Lime Mud
  • Polymetallic Nodules
  • Overburden/Waste

Implication: This prevents price manipulation, ensuring offshore mineral royalties are fairly calculated based on the broader market price rather than individual transactions.

Impact of the Amendments

1. Increased Government Revenue

• By setting higher minimum prices for offshore minerals, the government is ensuring better earnings from mining leases.
• The ad valorem royalty for polymetallic nodules ensures that revenues fluctuate in sync with market trends.

2. More Competitive Offshore Mining Auctions

• The revised pricing structure prevents undervaluation of offshore mineral blocks.
• With greater pricing transparency, offshore mining auctions are expected to attract more global bidders.

3. Cost Predictability for Mining Companies

• The fixed pricing model for dolomite, limestone, and sand allows better financial planning for mining operators.
• However, the ad valorem pricing for polymetallic nodules introduces market-driven cost variations.

4. Sustainable Mining & Waste Management

• The pricing introduction for overburden/waste (₹10 per tonne) ensures that waste management costs are accounted for in offshore mining operations.
• This is likely to encourage better environmental compliance in India’s offshore mining industry.

Industry Reactions & Future Outlook

1. Mining Industry Perspective

• Positive Response: Fixed pricing for dolomite, limestone, and sand provides cost predictability for companies.
• Concerns Over Ad Valorem Pricing: Some industry players may be concerned about higher costs due to the 3% royalty on polymetallic nodules.

2. Investor Outlook

• Enhanced Transparency: Investors appreciate the shift to an average sale price model, which makes royalty calculations predictable.
• Growing Offshore Mining Potential: With India exploring its Exclusive Economic Zone (EEZ) for rare minerals, nickel, and cobalt, offshore mining is expected to expand significantly.

3. Policy & Regulatory Landscape

• The amendments reflect the government’s commitment to strengthening offshore mineral governance.
• Future policies could introduce further refinements in deep-sea mining and rare earth mineral extraction.

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Source: Ministry of Mines

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