India Launches First-Ever Exploration Licence Auctions: 13 Critical Mineral Blocks Up for Grabs!

India has launched its first exploration licence (EL) auctions, offering 13 mineral blocks across 10 states, containing critical minerals like gold, copper, diamonds, zinc, rare earth elements (REEs), vanadium, and zirconium. The EL regime allows private companies to explore large areas and earn long-term revenue if valuable minerals are discovered. States with auctioned blocks include Chhattisgarh, Jharkhand, Maharashtra, Andhra Pradesh, and others. This initiative aims to boost domestic mineral exploration and attract private investment.

To encourage participation, the National Mineral Exploration Trust (NMET) offers a reimbursement scheme covering up to 50% of eligible costs. The auction follows a reverse bidding mechanism for fair competition. The central government took over EL auctions after delays from state governments, with a centralized approach expected to improve investor response. Additionally, ₹3,000 crore has been allocated to NMET and ₹4,000 crore to the Geological Survey of India (GSI) for exploration. The National Critical Minerals Mission targets 1,200 domestic exploration projects by 2030-31, supporting India’s goal of self-reliance in critical and strategic minerals.

India Launches First-Ever Exploration Licence Auctions: 13 Critical Mineral Blocks Up for Grabs!

India has taken a significant step in mineral exploration by launching its first-ever exploration licence (EL) auctions. This move makes 13 mineral-rich blocks across 10 states available for private sector participation, marking a major shift in the country’s approach to unlocking its vast mineral potential. These blocks contain critical and deep-seated minerals such as gold, copper, diamonds, zinc, rare earth elements (REEs), vanadium, and zirconium—resources essential for industries spanning electronics, renewable energy, defense, and aerospace.

A Shift in Policy to Boost Exploration

The Ministry of Mines introduced the EL auction regime after amending regulations in August 2023 to facilitate private sector involvement in early-stage exploration. Until now, mineral exploration in India has primarily been driven by government agencies, but the new framework allows private firms to explore designated areas and potentially benefit from long-term revenue if they discover commercially viable mineral reserves.

According to Mines Secretary V L Kantha Rao, this system is similar to international practices where private companies secure exploration rights for large areas, invest in geological studies, and, if valuable deposits are found, gain economic benefits over an extended period—potentially up to 50 years. This policy shift aims to bring in more investment and expertise to fast-track India’s mineral discoveries.

Distribution of Mineral Blocks Across States

The first tranche of auctions includes blocks in multiple states, covering a diverse range of minerals. Chhattisgarh and Jharkhand each have two blocks, with Chhattisgarh focused on diamonds and Jharkhand containing gold and copper. Similarly, Maharashtra has two blocks featuring tantalum and zinc. Other states with available blocks include:

• Andhra Pradesh – Rare Earth Elements (REEs)
• Arunachal Pradesh – Zinc
• Gujarat – Vanadium
• Karnataka – Gold and Copper
• Madhya Pradesh – Platinum-group elements
• Rajasthan – Rare Earth Elements (REEs)
• Uttar Pradesh – Zirconium

This widespread distribution of mineral blocks highlights the country’s rich and varied geological resources, opening up new opportunities for exploration in multiple regions.

Encouraging Private Investment with Incentives

Recognizing the high risks and costs associated with mineral exploration, the government has introduced financial incentives to attract private players. One key initiative is a reimbursement scheme through the National Mineral Exploration Trust (NMET), which will cover up to 50% of eligible exploration expenses, capped at ₹20 crore. This funding will support crucial exploration activities such as geophysical surveys, exploratory drilling, and chemical and petrological analysis.

The auction process follows a reverse bidding mechanism, where companies bid based on the lowest percentage share of the auction premium payable by the eventual mining licence holder. This ensures a competitive and fair selection process while promoting cost-effective exploration.

Government’s Takeover of the EL Auctions

Originally, state governments were responsible for conducting EL auctions, but delays and lack of interest from investors led the central government to intervene. Out of 14 states allocated blocks for EL, only six initiated the auction process, prompting the Ministry of Mines to take control of the auctions in October 2024.

The ministry emphasized that timely exploration of these critical minerals is crucial for India’s economic growth and self-reliance. A centralized auction system is expected to streamline the process, improve investor response, and accelerate mineral discovery, ensuring that India does not lag in securing vital resources for its industries.

Future Outlook: Strengthening India’s Mineral Exploration

Alongside the EL auctions, the government is also ramping up domestic mineral exploration through public-sector initiatives. The National Mineral Exploration Trust (NMET) has been allocated ₹3,000 crore, while the Geological Survey of India (GSI) has received ₹4,000 crore to enhance exploration efforts.

As part of its long-term strategy, the government has launched the National Critical Minerals Mission, which aims to complete 1,200 mineral exploration projects by 2030-31. This mission aligns with India’s broader economic and industrial goals, ensuring a stable supply of essential minerals for clean energy technologies, advanced manufacturing, and strategic sectors such as defense and aerospace.

Conclusion

The launch of exploration licence auctions marks a major shift in India’s approach to mineral discovery, transitioning from a government-led model to a more competitive, private sector-driven framework. By offering 13 mineral-rich blocks and providing incentives for private exploration, India is positioning itself to become a major player in the global mineral market. If successful, these reforms could significantly reduce India’s dependence on imported critical minerals, strengthen domestic industries, and drive long-term economic growth.