AUCTIONING OF CRITICAL MINERAL (Syllabus: GS Paper 3 - Infrastructure)

Context: The Union government is preparing to start the auction process for some 100 critical mineral blocks in the next four months, as part of plans to secure domestic supplies of the raw materials needed to fuel the green energy transition. 

• The blocks are for minerals including nickel, lithium, cobalt and platinum, along with rare earths.
• The legal framework has been laid out and the blocks have been identified.

Recent amendments

• Recently, the union cabinet approved amendments to the Mines and Minerals (Development and Regulation) Act allowing commercial mining of lithium and a few other minerals.
• The development comes just weeks after a committee set up by the Union ministry of mines declared 30 minerals as ‘critical’ for the country, including these six minerals. 
• Critical minerals refer those that are at risk of supply shortage, which may have a larger impact on the economy compared to that of other raw materials.
• The amendments will lift the ban on commercial mining of six critical minerals  - lithium, beryllium, titanium, niobium, tantalum and zirconium. 
• All of India’s lithium requirement is imported from countries such as Chile, Russia, China, Ireland and Belgium. 
• Beryllium is sourced from Russia, the UK, Netherlands, South Africa and China.
• So far, most of the exploration in the country has been focussed on bulk commodities like limestone, coal and iron ore. 
• With new requirements in technology and energy transition, there is a growing demand for these critical minerals, prompting the government to focus on the exploration of deep-seated and critical minerals.
• Among these minerals, the demand for lithium has grown manifold in the past few years, as the focus has shifted towards electric mobility and grid scale battery storage amid India’s energy transition. 
• The government has also come up with a production-linked incentive scheme for advanced chemistry cells. 
• Another for niche batteries manufactured with newer chemistries is also in the works.
• The Geological Survey of India has found the presence of significant lithium reserves totalling 5.9 million tonnes in Reasi district of Jammu and Kashmir. Another reserve has been found in Rajasthan.