PIB TrackerSeventh tranche of critical mineral auctions launched
The Mines Ministry opens 19 critical and strategic mineral blocks for auction under the post-2023 MMDR framework — with the sale proceeds flowing to the host States, not the Centre.
What happened
- The Ministry of Mines launched the Seventh Tranche of the auction of Critical and Strategic Mineral Blocks, offering 19 blocks across several States.
- The blocks are being offered under two instruments: the Mining Lease (ML), for fully explored deposits ready to mine, and the Composite Licence (CL), for partly explored deposits that still need a prospecting stage.
- The basket spans minerals for clean energy, advanced technology, fertilizers and strategic industry — including lithium, graphite, rare earth elements (REE), tungsten, vanadium and titanium.
- With this tranche, the cumulative offering builds on 46 blocks already auctioned across the first six tranches since the regime began in late 2023.
- Auctions are run online as a two-stage ascending forward auction, where the winner is the bidder quoting the highest percentage of the value of mineral dispatched.
- Two fresh rule changes ride alongside this tranche: the Mineral (Auction) Second Amendment Rules, 2025 (faster post-auction timelines) and the Mineral (Auction) Amendment Rules, 2026 (an Insurance Surety Bond option in place of a bank guarantee).
Background & context
The auctions sit inside one parent statute: the Mines and Minerals (Development and Regulation) Act, 1957 — usually shortened to the MMDR Act. This is the umbrella law that governs how every major mineral in India is explored, leased and mined; it is the Act that, after a 2015 amendment, made auction the mandatory route for granting mineral concessions, ending the older first-come-first-served and discretionary-allotment systems that the courts had struck down. Coal and certain atomic minerals sit under their own dedicated laws, but the broad family of non-fuel major minerals lives here. Mining and minerals are themselves a federal subject: regulation of mines and mineral development is in the Union List "to the extent declared by Parliament by law to be expedient in the public interest", and the MMDR Act is precisely that declaration, which is why the Centre can legislate the framework while States grant most concessions and collect the royalties.
The specific trigger for these critical-mineral tranches is the MMDR Amendment Act of 2023, notified on 17 August 2023. That amendment did two things that matter for the exam. First, it carved out a list of 24 minerals notified as "critical and strategic" and placed them in a new dimension of Schedule-I (commonly referenced as the Part-D list), so they could be treated as a special class. Second — and this is the unusual part — it shifted the power to auction Mining Leases and Composite Licences for these 24 minerals (where they occur) to the Central Government, instead of the State Governments who normally run major-mineral auctions. The reason is supply security: lithium, cobalt, REEs and the like are geologically concentrated in a handful of countries, and India imports almost all of them, so the Centre wanted a single national hand on the tap. The amendment is operationalised through Section 11D of the Act, which is the provision under which the Centre conducts these critical-mineral auctions.
The federal bargain built into the design is deliberate and is the single most testable point here: the Centre conducts the auction, but the entire revenue accrues to the State Government in which the block lies. The States keep the auction premium, the royalty and the contribution to the District Mineral Foundation; the Centre's role is to standardise the process and accelerate it. The Ministry of Mines is the nodal ministry; the Geological Survey of India (GSI) and the Mineral Exploration and Consultancy Limited (MECL) supply the exploration data that makes a block auctionable, and the Indian Bureau of Mines (IBM) regulates mining operations once a lease is granted.
For Prelims
- Event: 7th Tranche of Critical & Strategic Mineral Block auctions · 19 blocks across several States · offered as Mining Lease + Composite Licence.
- Enabling law: MMDR Act, 1957, amended 17 August 2023 · 24 minerals notified as Critical & Strategic.
- Constitutional/legal hook: the Central Government auctions these blocks under Section 11D of the MMDR Act.
- Revenue rule: the proceeds accrue to the respective State Governments, not the Centre.
- Cumulative progress: 46 blocks already auctioned across the first six tranches.
- Mineral basket: lithium, graphite, rare earth elements (REE), tungsten, vanadium, titanium — plus minerals for fertilizers and strategic industry.
- Auction method: online two-stage ascending forward auction; winner = highest quoted percentage of value of mineral dispatched.
- Latest reforms: Mineral (Auction) Second Amendment Rules, 2025 (streamlined post-auction timelines — performance security, upfront payment, Letter of Intent) and Mineral (Auction) Amendment Rules, 2026 (Insurance Surety Bond as an alternative to bank guarantees).
- Nodal ecosystem: Ministry of Mines (nodal); GSI & MECL (exploration); Indian Bureau of Mines (regulation); National Critical Mineral Mission (the broader policy umbrella).
- Mining Lease vs Composite Licence: an ML is granted for a fully explored block (G2/G1-level data) ready to be mined; a CL is a two-in-one grant (prospecting licence-cum-mining lease) for a partly explored block (G4/G3) that still needs prospecting before mining.
Why it matters
Critical minerals are the physical bottleneck of the energy transition and of modern defence and electronics. A lithium-ion battery needs lithium, cobalt, nickel and graphite; a wind turbine and an EV traction motor need rare-earth permanent magnets (neodymium, praseodymium, dysprosium); semiconductors, missiles and night-vision optics need gallium, germanium, tungsten and titanium. India currently imports the overwhelming majority of these — a single-country dependence for several of them — which is a strategic vulnerability when supplier nations can impose export controls. By building a domestic auction pipeline, the Centre is trying to convert India's own under-explored geology into producing mines, and to give private capital the certainty of a transparent, time-bound process. India's discovery of a large lithium resource in the Reasi district of Jammu & Kashmir, and the inclusion of REE and graphite belts across States such as Andhra Pradesh, Jharkhand, Karnataka, Tamil Nadu and Rajasthan, is exactly the kind of geology these tranches are meant to monetise. The wider stakes are economic as well as strategic: a domestic mineral base lowers the import bill, anchors downstream value addition — refining, magnet-making, cell manufacturing — inside India rather than leaving the country a mere importer of finished components, and supports flagship programmes such as the FAME and PLI schemes for electric mobility and battery storage that all depend on assured mineral inputs. The reforms attached to this tranche — surety bonds instead of bank guarantees, faster Letter-of-Intent timelines — are aimed squarely at the recurring problem that blocks get auctioned but take years to actually start producing. The design also answers a federalism question: by routing all the revenue to the States, the Centre buys State cooperation for a process it controls, keeping the cooperative-federalism balance that mineral governance depends on.