New Delhi: India's Ministry of Mines will launch the first tranche auction of critical and strategic minerals on Wednesday, an official press release said.

Mines Minister Pralhad Joshi will launch the first-ever critical minerals auction process.

According to the ministry, 20 blocks of critical and strategic minerals being auctioned are spread across the country.

“This is a landmark initiative that will boost our economy, enhance national security and support our transition to a clean energy future,” read the statement.

Critical minerals are essential for our country’s economic development and national security.

The lack of availability of these minerals or the concentration of their extraction or processing in a few countries may lead to supply chain vulnerabilities.

The future global economy will be underpinned by technologies that depend on minerals such as lithium, graphite, cobalt, titanium and rare earth elements (REE).

India has committed to achieve 50% of cumulative electric power installed capacity from non-fossil sources by 2030.

Such an ambitious plan for energy transition is set to drive the demand for electric cars, wind and solar energy projects and battery storage systems thereby increasing the demand for these critical minerals.

Critical and Strategic Minerals are in high demand and the same is usually met by imports. Critical minerals cater to the needs of sectors like renewable energy, defence, agriculture, pharmaceutical, high-tech electronics, telecommunications, transport, the creation of gigafactories, etc.

Recently, through an amendment in the MMDR Act on 17th August 2023, 24 minerals were notified as Critical and Strategic minerals.

The amendment confers the power to grant the mineral concession of these minerals to the Central Government so that the Central Government can prioritise the auction of these minerals looking at the requirements of the country.

The revenue generated from these auctions will accrue to State Governments, the ministry said, adding that the subsequent, royalty rates of critical minerals have been rationalized to encourage more participation in auctions.

The Government had specified royalty rates for Platinum Group of Metals (PGM) at 4%, Molybdenum at 7.5%, and Glauconite and Potash at 2.5% in March 2022.

On 12th October, 2023 the government specified royalty rates for Lithium at 3%, Niobium at 3%, and Rare Earth Elements at 1%.

The commencement of the sale of the tender document will start on November 29, 2023.

Details of the mineral blocks, auction terms, timelines, etc. can be accessed on the MSTC auction platform at www.mstcecommerce.com/auctionhome/mlcl/index.jsp from 6 pm on 29th November 2023.

The auction shall be held online through a transparent two-stage ascending forward auction process.

The eligible bidder shall be selected based on the highest percentage of the value of the mineral despatched quoted by them.