About a third of critical mineral blocks offered at auction stay unsold. Analyse the causes and evaluate recent rule-level reforms meant to fix this.

Critical minerals such as rare earths, gallium and graphite are needed for EVs, defence and electronics. Yet only 64 of 100 unique blocks were sold across eight tranches [1]. Blocks fail mainly because too few firms bid, not because the minerals are missing. Recent reforms fix the procedural causes better than the deeper ones.

Causes of unsold blocks

• Bidder threshold: In Tranche I, 13 auctions were annulled. Two got no bids and 11 had fewer than 3 Technically Qualified Bidders (TQBs) [2].
• Weak exploration data: A parliamentary committee found most bauxite resources unexplored and asked for reserves to be upgraded to proven ones [3]. Poorly explored blocks put off careful bidders.
• Thin expertise: Few Indian firms have worked with gallium, vanadium or rare earths, and India lacks refining capacity [3].
• Post-auction risk: Forest clearance is needed even at the exploration stage [3]. The Nayakkarpatti tungsten block was annulled after its auction because it overlapped a Biodiversity Heritage Site [4].
• Cost of failure: Seven of the 11 annulled blocks had to be offered again in Tranche III [2]. Each re-run adds months of delay.

Evaluating recent reforms

Strengths

• Mineral (Auction) Third Amendment Rules, 2026: The minimum TQBs for the second round (Part D minerals) fall from 3 to 2 [1]. This targets the main cause, and only for blocks that have already failed once.
• Transparency: LoIs (Letters of Intent) are now issued automatically through the Unified Mining Portal, and bidding runs online on MSTC [1].
• Intermediate timelines: Bidders now have 6, 18 and 12 months for mining plan, environment clearance and lease [5]. Their performance security is cut 1% for each month of delay they cause, and a Mining Dashboard tracks progress [6].
• Second Amendment Rules, 2026: Unworkable portions (forest, rivers) holding under 25% of resources can be left out of a block. The extra time extension is kept for forest blocks only [7].

Limitations

• With only two bidders, prices rise less and collusion is easier. State governments lose the revenue.
• No reform fixes the data gap or screens land for ecological risk before the auction.
• "Sold" is not "mined": the committee's proposed inter-ministerial monitoring group does not yet exist [3].

Overall, the reforms are practical and aimed at the right procedural problems, but they do not go far enough. Several steps would close the gap and help reach the National Critical Mineral Mission target of 1,200 exploration projects [8]:

• deeper exploration by GSI and NMET before blocks are offered;
• screening each block against protected-area maps before the tender notice;
• publishing bid premiums alongside TQB counts so the two-bidder rule can be audited.

Turning auctions into working mines would advance Aatmanirbhar mineral security and SDGs 7 and 9.