State Governments Issue NITs for Grant of Exploration Licences in Critical Mineral Reserves

The State Governments of Karnataka and Rajasthan were the first States to notify the auction of exploration license (EL) for critical and deep-seated minerals on March 6,  2024. Karnataka launched an auction of one block of Gold, Copper, and Lithium in Raichur & Yadgir districts and Rajasthan launched an auction of three blocks of Rare Earth Elements, Rare Metal, and Potash minerals in Barmer, Jodhpur, Hanumangarh, Churu, Bikaner, Sri Ganganagar, Jaipur, Nagaur, and Sikar districts.

 

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The Exploration Licence regime has been introduced through amendment to the Mines and Minerals (Development and Regulation) Act, 1957 effective from 17.08.2023, to further boost the exploration and mining of 29 critical and deep-seated minerals in the country. Exploration Licence can be granted for minerals specified in the Seventh Schedule through auction. The process for granting of Exploration Licence has been notified through the Mineral (Auction) Amendment Rules, 2024.

To expedite the launch of NIT for the auction of Exploration Licence, State Governments worked tirelessly to prepare the blocks for auction and the Central Government provided the necessary prior approval for auction. To further support and handhold the State Governments, the model tender document for auction for the grant of Exploration Licence was provided by the Ministry of Mines on 01.03.2024.

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The Exploration Licence regime is aimed at expediting the exploration of critical minerals such as lithium, copper, silver, diamond, and gold, and involves active participation from the private sector. Through the auction process, the licensee will be permitted to conduct reconnaissance and prospecting operations to identify viable mining areas. The license holder will get a share of the revenue from the auction premium for 50 years as per the auction bid. Further, the EL holder can transfer the license after the execution of the EL.

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