A tepid start: India's critical mineral block auctions see weak response

The Ministry of Mines last week annulled the auction process for five blocks under the ongoing tranche-5 of the critical mineral auction, citing poor investors’ response. 

Under the Mineral (Auction) Rules, 2015, the auction was cancelled as there were no bids for three blocks — the Katesar-Guneri Glauconite Block in Gujarat, the Kelenda Glauconite Block in Chhattisgarh, and the Holalkere-Doddaghatta Nickel and PGE Block in Karnataka. 

The sale of two other blocks — the Khobna and Agargaon Cluster Tungsten Block in Maharashtra and the Mincheri Rare Earth Element Block in Karnataka — was annulled as the criteria of minimum three technically qualified bidders could not be met. 

Since the launch of auctions for critical minerals in 2023, the government has offered 81 blocks across five tranches — 56 blocks offered for the first time, and 25 auctioned again after failing to attract bidders earlier. 

Of these 81 blocks, 34 attracted a sufficient number of bidders to move forward, 33 saw fewer than three technically qualified bidders, and 14 received no bids at all, leading to the cancellations. 

In these auctions, the government grants two types of concessions: a mining lease allows the winning bidder to directly undertake mining operations, while a composite licence combines prospecting and mining rights, enabling the licencee to first explore the area and then transition into mining.