India could explore ‘on-tap’ allotment of critical mineral blocks as a revised policy step, enabling for faster auction and allocation of such blocks thereby ensuring higher chances of successful bidding, sources told businessline.
An ‘on-tap policy’ means that a licence or permission to operate in a particular sector is available to eligible applicants at any time throughout the year, rather than being issued only during specific application windows. So, anyone meeting the specified criteria can apply.
A Mines Ministry official explained that if there are multiple bidders or interested parties for a particular critical mineral block, and these interested bidders reach out on it, the Ministry could push forward or fast-track approvals to enable the block to be put up for auction as quickly as possible.
“What this means, we may include a particular block in the next round of due auctions. Or may club a number of such popular blocks and put them up for a new tranche of auctions. This ensures better success for the blocks during an auction process, as we already know the interest levels. So, this ‘on-tap policy’ is being looked at and some detailing including the legal requirements are being looked into,” the official said.
Currently, critical mineral blocks are put up for auctions under a reverse bidding mechanism.
In India, a “critical mineral reverse bidding mechanism” refers to a process where companies bidding for exploration licences on critical minerals like lithium, cobalt, and nickel, compete by offering the lowest percentage share of the auction premium they will take from the eventual mining leaseholder of the explored block, essentially “bidding down” to secure the exploration licence. This system incentivises exploration activity while maximising government revenue from critical mineral extraction.
The country has identified 24 such minerals that are of critical or strategic importance, which include lithium, graphite, tin, tungsten, bauxite, molybdenum, vanadium, among others. Most of these are imported.
In December last year, Mines Minister GK Reddy told the Lok Sabha that out of 48 blocks put to e-auction, 24 have been successfully auctioned (with a 50 per cent success rate), including four mining lease (ML) and 20 composite license (CL) blocks.
Other Policy Tweaks
India is also looking to rework the scheme for partial funding of critical minerals. Although announced in June 2024, the scheme has not found any takers so far. Potential beneficiaries included private exploration agencies, junior mining companies and even State government. Tweaks could include increasing the upper limit of the reimbursements.
As per the scheme, the government will provide 50 per cent reimbursement for exploration of critical minerals with a cap of ₹20 crore by the National Mineral Exploration Trust (NMET).
“So, we are in talks with the industry and may look at increasing the upper limit of the reimbursements – may be to ₹40 crore or so,” the official said.
Of 393 projects sanctioned by NMET, 122 projects are of critical minerals; and the Ministry has notified 22 private exploration agencies so far.
