Centre to intensify advance-level exploration of critical mineral blocks

The Centre is planning to intensify advance-level exploration of critical mineral blocks before putting them for auction, a move which seeks to boost investor confidence and comes against the backdrop of miners’ lukewarm response received during different tranches of auctions recently.

 

The government is also planning to launch a single-window clearance portal for mining projects by December, which will expedite the mining project execution, including that of critical minerals, said a senior official. 

“The mines ministry is working towards ensuring an advanced level of exploration (G2) before critical mineral blocks are put up for auction,” the official said. “Higher level of exploration is a costly exercise, but it will be done to boost industry confidence in the availability of critical minerals,” he added. 

The move aims to address concerns among companies about the limited exploration of blocks being put up for auction. Critical minerals power clean energy technologies, from silicon in solar panels and rare earths in wind turbines to lithium, nickel, and cobalt in electric vehicles and energy storage systems, driving India’s renewable energy ambitions. After China’s curb, India has been trying to expedite the process to find critical minerals. 

The stages 

Mineral deposits are explored in four steps — Reconnaissance (G4), Preliminary (G3), General (G2), and Detailed (G1).

Each step gives more information and confidence about the mineral’s quantity and quality, corresponding to four resource categories including Reconnaissance (low confidence), Inferred (low but improvable), Indicated (moderate), and Measured (high confidence). 

Based on exploration, the government grants licences. 

A composite licence can be auctioned once at least G4 level is done to estimate Reconnaissance Mineral Resource or identify mineral potential. A mining lease is granted only after G2, establishing Indicated Mineral Resource. 

In the six tranches of auctions so far, the government has offered 77 fresh blocks. Out of these, 66 are for composite licences indicating that most blocks offered have low exploration levels. Of 56 blocks put up for auction across five tranches, 34 have been successfully auctioned with the rest being annulled owing to lack of bidders. The sixth tranche is still ongoing. 

Experts say that the industry feels the level of exploration data provided, particularly for critical mineral blocks, is limited. 

“The G3 or G4 level of exploration may not meet the expectations of major private firms, who typically seek G1 or G2 level reports to make investment decisions,” said Vinod Kumar, partner and leader (manufacturing), PwC India. 

Another expert said the shift could be a turning point for India’s critical mineral strategy, which has so far struggled to attract large, technology-intensive players due to limited geological certainty. 

“The G3 stage is a prospecting phase, so there is lower confidence on the critical minerals resources estimation and associated economic feasibility,” said Amit Bhargava, National Leader (Metals and Mining), KPMG India. 

He also said that in case of major minerals like coal or iron ore, miners have had years of operational experience but it is not the case with critical minerals and hence the confidence level around such minerals’ resources and the overall economic construct needs to be greater to secure interest from investors. 

“Moving to a G2 (general exploration) level would significantly improve bidders’ confidence on the resources’ estimates enabling wider and quality participation in critical minerals’ mines auctions,” he said. 

However, he cautioned that exploration alone will not resolve structural challenges. In cases like the clay-form lithium in Jammu and Kashmir, challenges extend beyond exploration to technical and operational hurdles. Extracting and refining lithium (to battery grade) commercially requires suitable technologies and facilities within India to realise its full value, he said. 

Single-window clearance system 

Alongside exploration reforms, the mines ministry is developing a single-window online clearance system that will consolidate all approvals required for mining operations, including those auctioned by state governments. 

“The ministry is launching a single-window clearance portal for all kinds of clearance for the mining sector. The mining companies can apply and track the status of their clearances on the portal. It will be for both mines auctioned by the Centre and the state governments. It will be launched in December,” the official said. 

The initiative seeks to eliminate long-standing procedural bottlenecks that have slowed India’s mining sector. “A potential single window clearance portal is indeed a much awaited and applauded reform that could speed up the time to operationalise the auctioned mines” said Bhargava. 

Experts believe a unified portal that facilitates pre-approvals, visibility, workflows, escalation and decisive action would go a long way in improving the track record of timely operationalisation of mines.