India explores more options for J&K lithium block before another auction
The Union government is likely to conduct further mineral exploration of the lithium block in Jammu and Kashmir’s Reasi district after facing setbacks in auctioning it twice. The block holds great potential for bolstering India’s electric vehicles push but failed to attract interest from key players.
Located in the Reasi district of the union territory, the lithium block has estimated reserves of 5.9 million tonnes of the critical mineral. Lithium plays a vital role in manufacturing lithium-ion batteries that power electric vehicles, energy storage systems and consumer electronics. However, both auctions conducted this year in March and July had to be annulled as technical bids from less than the minimum three qualified companies were received.
As per auction rules, bidding continues to the second round even with less than three bidders. But with zero qualified participants this time, the block could not be awarded. The Ministry of Mines is now exploring whether additional surveys are required to assess the mineral deposits better and make the block more attractive. The Union Coal and Mines Minister has also acknowledged starting fresh exploration work with the J&K administration.
The experience highlights some issues that the first-ever auction of critical minerals in India has thrown up. Interested parties had questioned limited data availability and smaller block size restricting advanced analysis during the first attempt. No beneficiation studies were also conducted to examine lithium extraction feasibility from the resources.
India is stepping up domestic lithium mining and processing to integrate more deeply into global supply chains for electric mobility. The successful auction of a lithium block in Chhattisgarh earlier offers hope. More due diligence on J&K’s lithium reserves can boost transparency and potentially lead to a committed developer investing in its responsible mining and local value addition.
