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The Centre, which will soon commence India’s maiden critical minerals’ auction, is hopeful of production from these mines in four years.
The government is looking at means to expedite critical mineral mining and targeting to start the production phase by the end of financial year 2028 (FY28), officials said.
This would give India an edge over the importer countries as the mining process for critical minerals usually takes close to a decade.
“The aim is to expedite the mining process and reach the production phase within four years,” VL Kantha Rao, secretary, ministry of mines, told Business Standard.
The International Energy Agency’s (IEA’s) ‘The Role of Critical Minerals in Clean Energy Transition’ report released in 2021, indicates that major global mining projects, which became operational between 2010 and 2019, took an average of 16.5 years from discovery to production.
Exploration and feasibility studies take over 12 years on average, while the construction phase, including production, takes four-five years, the IEA report highlights.
The specific duration can differ based on factors such as the type of mineral, geographical location, and mining method.
For instance, in Australia, the average lead time — time taken from discovery to production — for lithium was approximately four years, compared to about seven years in South America.
Similarly, the timeline fluctuates based on mineral quality.
A nickel (sulfide) mine takes 13 years to commence operations compared to 19 years for a nickel (laterite) mine, the IEA report shows. Moreover, the mining timeline is also influenced by technological advancements and procedural changes in the mining process.
The 20 blocks, which have been put for bidding by the Centre, have surpassed the exploration stage and some would need a comprehensive feasibility study. Of these blocks, only four have been specifically earmarked for “mining leases”, while the others are for “composite licences”.
Under a “mining lease”, licence holders directly do the mining, but “composite licence” holders do both prospecting and mining.
Moreover, as many as 23 clearances, including environmental and state ones, are required for operating a mine. The winning bidders will have to obtain these after their successful bids.
In order to expedite the auction process, the government is also planning to announce the successful bidder within weeks after the conclusion of the auction process.
“To accelerate the mining timeline, the results of the bids will be announced within weeks following the closure of the auction,” a source close to the development said.
India is seeing its inaugural auction of critical minerals.
The tender document for critical minerals was issued by the ministry of mines last month and comprises 14 minerals. But only 10 of them belong to India’s list of 24 critical minerals.
These 10 critical minerals are glauconite, nickel, platinum group elements (PGE), potash, graphite, molybdenum (ore), phosphorite (phosphate), lithium, titanium, and rare earth elements (REE).
The remaining four — chromium, copper, manganese (ore), and bauxite — are listed because these minerals are found in rocks that also contain critical minerals.
These blocks are spread across seven states — Bihar, Gujarat, Jharkhand, Odisha, Tamil Nadu, Uttar Pradesh, and Chhattisgarh — and the Union Territory of Jammu & Kashmir.
With the local production of critical minerals, the government intends to significantly reduce import expenses worth billions of dollars and secure the supply chain against potential risks stemming from China.
According to the government, the collective value of these 20 blocks is around $5.4 billion (Rs 45,000) crore. However, the import value of the 10 critical minerals was $11 billion (Rs 91,000 crore) in FY23, ministry of commerce and industry data reveals.
While the initial phase may only reduce a fraction of the import volume, the government aims to safeguard the supply chain, this paper had reported recently.
