Jammu and Kashmir to Re-Auction Lithium Blocks After Two Unsuccessful Attempts

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No Bids for Second Lithium Auction in J&K

The federally administered region of Jammu and Kashmir in India will re-auction its lithium reserves following two failed attempts to attract the required number of bids. According to a reliable source with direct knowledge of the situation, the latest auction in May did not receive any bids, leading the government to reconsider its strategy for these valuable deposits.

In February 2023, India discovered its first lithium deposits in the Reasi district of Jammu and Kashmir, with estimated reserves of 5.9 million metric tons. Despite the initial excitement, the government has struggled to secure interest from potential bidders. The first auction, held in November, also failed to meet the minimum requirement of three bids, leading to the block being re-auctioned in March with a deadline for bids on May 14.

Potential Transfer to Government Agency

With the lack of interest from private entities, the lithium block may now be handed over to a government agency for further exploration and potential development. This move comes as India’s Ministry of Mines has yet to comment on the situation. The source, who chose to remain anonymous, indicated that the government is exploring alternative options to ensure the reserves are utilized effectively. The failure to attract bids raises questions about the composition and viability of the lithium deposits in Jammu and Kashmir. Analysts have suggested that the specific characteristics of the deposit may be contributing to the lack of interest from mining companies.

Importance of Lithium in Clean Energy Transition

Lithium is a critical component in the production of batteries for electric vehicles (EVs) and renewable energy storage systems, such as wind turbines and solar panels. The discovery of lithium in India is significant given the global push towards cleaner energy solutions. The World Bank has predicted that the demand for critical metals like lithium could increase by nearly 500% by 2050, driven by the need for sustainable energy sources.

Third Auction Tranche and Broader Mineral Strategy

The Ministry of Mines announced that Jammu and Kashmir’s lithium reserves will be included in a third tranche of auctions. This new round aims to address the lack of interest in the previous attempts and includes seven critical mineral blocks for auction, such as glauconite, graphite, nickel, potash, and titanium. These blocks are spread across various states, including Bihar, Jharkhand, Tamil Nadu, Uttar Pradesh, and the Union Territory of Jammu and Kashmir.

The auction process follows the guidelines outlined in the Mineral (Auction) Rules, 2015, and aims to attract sufficient bids to move forward with the exploitation of these critical resources. The notice inviting tenders has been published on the MSTC e-auction portal and the Ministry of Mines website.

The Geological Survey of India (GSI) discovered lithium inferred resources in Jammu and Kashmir last year, marking a significant milestone in India’s efforts to secure domestic sources of critical minerals. The government remains optimistic about the potential for these resources to play a crucial role in the country’s transition to cleaner energy and the expansion of its EV industry. The upcoming third auction tranche represents a renewed effort to tap into these valuable reserves and support India’s long-term energy and economic goals.

(With inputs from agencies)

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