SRINAGAR: India’s efforts to secure a domestic supply of lithium have encountered a significant hurdle as the Ministry of Mines has annulled the auction for the lithium block in Jammu and Kashmir’s Reasi district for the second time on July 25. The block, holding an estimated 5.9 million tonnes of lithium ore, has repeatedly failed to attract sufficient investor interest.
A group of excited resident in Reasi’s Salal area with soil blocks that has Lithoium in it. The GST said in February 2023 that the area has 5.9 million tonnes of Lithium.
The first auction, launched in November 2023 for a composite license (CL), was annulled on March 13 after fewer than the required minimum of three bidders qualified in the technical bids round. The Ministry immediately re-invited bids the next day, only for the auction to be annulled again last week due to a complete lack of qualified bidders. The minimum bidder requirement is typically waived off for second attempts, but the auction cannot proceed without any bidders at all.
“Critical Minerals are auctioned in the country for the first time. Like any other auction, in the auction of critical minerals also, the required number of responses may or may not be received,” the Mines Ministry has stated, according to reports appearing in the media. Regarding the Jammu and Kashmir lithium block, the Ministry mentioned, “The ministry is examining whether further exploration is required.”
Union Minister of Coal and Mines G Kishan Reddy informed the Rajya Sabha on July 22 that exploration work in Jammu and Kashmir, led by the Geological Survey of India (GSI) in collaboration with the Jammu and Kashmir government, is ongoing. “As soon as possible, we will complete the exploration and auction it to start work on mining lithium with full force,” Reddy assured.
Lithium, a critical mineral essential for electric vehicle (EV) batteries, energy storage systems, and consumer electronics, has seen increasing global demand. India’s drive to develop domestic lithium mining is part of a broader strategy to transition to cleaner energy sources and achieve self-reliance in critical mineral supplies.
The initial auction of the Jammu and Kashmir lithium block was part of the Ministry’s first tranche of critical mineral auctions, which also included a lithium block in Katghora, Chhattisgarh. The Katghora block was successfully auctioned to Kolkata-based Maiki South Mining Pvt Ltd with a premium of 76.05 per cent.
However, the Reasi block faced several issues. Prospective bidders raised concerns over the bid document’s limited information and the block’s size, which they deemed too small to apply modern mineral exploration tools effectively. Queries about the feasibility of extracting and processing lithium from the resources identified in Jammu and Kashmir went unanswered, further dampening interest.
The Ministry launched seven critical mineral blocks in the third round of auctions on March 14, spanning across states including Bihar, Jharkhand, Tamil Nadu, Uttar Pradesh, and Jammu and Kashmir. Despite the Ministry’s efforts, low participation rates led to the annulment of multiple blocks. In the second tranche, 14 blocks were cancelled due to lukewarm responses, and in the first tranche, 13 out of 20 blocks faced the same fate.
To bolster its critical mineral supplies, the government has now initiated the fourth round of auctions, offering 21 mines across several states, including new blocks in Arunachal Pradesh, Chhattisgarh, Jharkhand, Karnataka, Rajasthan, and Uttar Pradesh. These blocks contain various minerals such as Graphite, Glauconite, Phosphorite, Potash, Nickel, PGE, Phosphate, and Rare Earth Elements (REE).
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