“Coal India is looking to directly take certain rare earth mines. Given that it is a PSU, it can apply for certain mines directly. And it is also expected to take part in the (J&K) auctions,” said a person aware of the developments.
The company would be able to apply for mines reserved for government companies or corporations. In both the Mines and Minerals (Development and Regulation) Act and Offshore Areas Mineral (Development and Regulation) Act, provisions have been made to grant mineral concessions without competitive bidding to government companies on payment of such amount as may be prescribed by the Centre for such reserved areas.
Queries mailed to CIL remained unanswered till press time.
The company’s plans to foray into domestic critical mineral assets comes with the government’s new focus in the segment. CIL has already been looking into acquisition opportunities for critical mineral mines abroad.
In its annual report for FY23, the company had said: “We are exploring the acquisition of lithium, cobalt, and nickel assets abroad and have amended our Memorandum of Association (MoA) to include non-ferrous and critical minerals. We are currently identifying suitable overseas assets for mergers and acquisitions.”
On prospects of acquisition of foreign critical mineral assets, another person said on the condition of anonymity that CIL is having deliberations with prospective overseas partners and agreements are expected soon.
India is a net importer of critical minerals and in a bid to boost domestic mining, the government last year passed the Mines and Minerals (Development & Regulation) Amendment Bill, 2023 wherein it introduced exploration licence for deep-seated and critical minerals.
In June, the ministry of mines came up with a list of 30 minerals critical to India’s economy—antimony, beryllium, bismuth, cobalt, copper, gallium, germanium, graphite, hafnium, indium, lithium, molybdenum, niobium, nickel, PGE (platinum-group elements), phosphorous, potash, REE (rare earth elements), rhenium, silicon, strontium, tantalum, tellurium, tin, titanium, tungsten, vanadium, zirconium, selenium, and cadmium. Rare earth elements include neodymium, praseodymium, dysprosium, europium, yttrium, and terbium.
Several of these minerals are key for energy transition, defence, and telecom equipment manufacturing.
Lithium, in particular, is among the highest in demand given its use in batteries—for mobile phone, electric vehicles and grid-scale storage systems, for which India is completely import dependent, mostly from China.
The Geological Survey of India (GSI) last year found lithium reserves of about 5.9 million tonne in J&K. These blocks are likely to be put up for auction next month.
Another block in Chhattisgarh would also be auctioned in February. More lithium reserves have been discovered in Rajasthan and Jharkhand.
In July 2023, union minister of mines Pralhad Joshi had told Parliament that in FY24, the GSI has undertaken about 122 critical mineral exploration projects.
CIL’s diversification plans are spread across multiple segments, including renewable energy, thermal power, coal gasification, coal bed methane (CBD) projects, fertilizer and aluminium business.
Although in the near-to-medium term, coal production is set to increase, production of the mineral is likely to plateau in the longer run post 2045 and eventually stop, which would need the world’s largest coal mining company to look for newer avenues.
Ritabrata Ghosh, vice-president and sector head, corporate sector ratings, ICRA said: “There is immense opportunity in diversification towards critical minerals as seen in countries like Australia and China, which have rapidly ramped up production. However, given the limited exploration carried till date, India’s lack of domestic availability of world-class deposits of critical minerals like lithium, nickel cobalt, and others remains a concern from the energy security perspective. Further, the technology to extract lithium from clay deposits, as found in Jammu & Kashmir, is not yet proven commercially. We may have to wait and see how things evolve.”
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Published: 18 Jan 2024, 11:31 PM IST