Miners cold to critical minerals prompt govt to rethink licensing

livemint.com:

NEW DELHI : The Centre may issue so-called composite licences to find and extract critical minerals, in effort to end the fragmented nature of licensing, and tempt mining giants which passed up the blocks that went on auction last year. Critical mineral auction is currently a two-step process. In the first step, exploration licences are auctioned, and the bidder agreeing to share the lowest amount with a future miner wins the licence.

Once a discovery is made, another bid is called, and the miner offering the highest revenue share to the government wins the right to mine. This model has discouraged mining giants and the government is now considering merging the two licences into one, two officials said. “Combining the two would make sense for big exploration companies and will help India discover and mine more.

It is not financially lucrative for companies to focus only on exploration and then bid separately for carrying out mining of discovered resources," one of the two officials said on the condition of anonymity. Critical and strategic minerals are key to many sectors, including high-tech electronics, telecommunications, transport and defence. Of particular significance is lithium, a key component in rechargeable batteries used in electric vehicles and storage systems.

While China controls 75% of global lithium refining, India's lithium imports were disrupted by the war in Ukraine. Besides, India imports its entire requirement of nickel, used in stainless steel manufacturing. In fact, Jindal Stainless Steel recently acquired a 49% stake in an Indonesian company to secure nickel supplies.