Ministry of Mines to Launch Auction of Offshore Mineral Blocks in Andaman Sea

1. At a Glance

• The Ministry of Mines is auctioning two offshore mineral blocks in the Andaman Sea. Winners get a Composite Licence, which covers both exploration and production. [1]
• The auction is held under the Offshore Areas Mineral (Development and Regulation) Act, 2002 (OAMDR Act) and the Offshore Areas Mineral (Auction) Rules, 2024. [1]
• The target minerals are cobalt, nickel, manganese, copper and rare earth elements. They feed electric vehicles, renewable energy, advanced electronics and strategic industries. [1]
• UPSC relevance: it links critical-mineral security, the Blue Economy, marine ecology and governance reform (auction replacing discretionary allocation). It fits GS-III well.

2. Why in the News

• On 30 Sep 2026, PIB announced that the Ministry of Mines would launch the auction of offshore mineral blocks the next day (1 Oct 2026). [1]
• The auction has two Andaman Sea blocks, offered for a Composite Licence. [1]
• The government says it will bring systematic exploration, investment, advanced technology and private sector participation. [1]

3. Background & Evolution

• 2002: The OAMDR Act, 2002 was enacted to regulate minerals in India's offshore areas. [1][10]
• 27 Jul 2023: The OAMDR Amendment Bill, 2023 was introduced in the Lok Sabha. [2]
• 1 Aug 2023: Lok Sabha passed it. 3 Aug 2023: Rajya Sabha passed it. [2]
• Aug 2023: The amendment made auction the mandatory mode for allocating offshore mineral blocks. [3]

• Before this, rights were not allocated by auction. Pending applications became void when the amendment took effect. [2]

• Draft Offshore Auction Rules were published for public consultation. [7]

• 2024: The Offshore Areas Mineral (Auction) Rules, 2024 were notified. [1]
• 28 Nov 2024: Union Minister of Coal and Mines G. Kishan Reddy launched the first-ever tranche of offshore auctions. [5]

• It had 13 blocks across the Arabian Sea and Andaman Sea. [4][5]

• 3 Dec 2024: Sale of tender documents began. Bids were due by end-Feb 2025. [4]

• Dec 2024 – Jan 2025: Investor roadshows were held in Gujarat and in Kochi (Kerala). [8][9]
• 30 Sep 2026: The new Andaman Sea auction (2 blocks) was announced. [1]

4. Core Static Facts

5. Multi-Dimensional Analysis

Economic

• Domestic sources of Co, Ni, Mn, Cu and rare earths would cut import dependence for EVs and renewables. [1]
• Sand blocks off Kerala serve its construction and real-estate sectors. Lime-mud blocks off Gujarat serve the cement industry. [8][9]
• Payments pegged to a share of mineral value, plus the upfront payment, give the Union a share of revenue. [4]

Environmental

• Rules 10(5) and 18(3) make environmental clearances a precondition. [6]
• The Offshore Areas Mineral Trust funds research on reducing ecological harm and on disaster relief. [2]
• Fe-Mn nodules and crusts sit on the seabed, so mining them disturbs benthic habitats. The Andaman Sea is ecologically sensitive. (Analytical point, not taken from a cited source.)

Geopolitical / Strategic

• The release frames the auction as part of "resilient supply chains" and "strategic industries". [1]
• Reserving atomic minerals for government entities protects strategic resources. [2]
• The Andaman Sea is near the Malacca Strait, which gives the blocks maritime-security value. (Analytical point.)

Legal / Governance

• Auctions replace discretionary allocation, which makes the process more transparent and competitive. [1][3]
• Voiding pending applications gave all bidders a clean start. [2]
• Higher penalties make enforcement stronger. [2]

Scientific / Technological

• The government expects the auction to bring in advanced exploration technology and innovation. [1]
• Composite Licences push the exploration risk and the technology investment onto private bidders. [2][6]

Administrative

• The Ministry held roadshows and webinars to bring in bidders. [8][9][11]
• Fishing communities and coastal states such as Kerala have a stake. Coordinating the Centre with coastal states is a practical challenge. (Analytical point.)

6. Recent Developments (last 12–18 months)

• 30 Sep 2026: The Andaman Sea auction (2 blocks, Composite Licence) was announced to launch on 1 Oct 2026. [1]
• Parliament question on "Offshore deep-sea mining in Kerala": the government's reply cited the Composite Licence regime and Rules 10(5) and 18(3). [6]
• Feb 2025: The bid deadline for the first tranche. [4]
• I could not verify the first tranche's results (bids received, blocks awarded or annulled) from whitelisted sources.

7. Prelims Hooks

• The OAMDR Act was enacted in 2002. Its auction-mandating amendment came in 2023. [1][3]
• The Rules governing offshore auctions are the Offshore Areas Mineral (Auction) Rules, 2024. [1]
• The amendment bill was introduced in the Lok Sabha on 27 Jul 2023 and passed by the Rajya Sabha on 3 Aug 2023. [2]
• A Composite Licence is an exploration licence-cum-production lease. [6]
• Offshore production lease tenure is 50 years. [2]
• The exploration period under a Composite Licence is 3 years, extendable by 2. [2]
• Offshore licences for atomic minerals go only to the government or government companies. [2]
• The Offshore Areas Mineral Trust was created by the 2023 amendment. [2]
• The first tranche had 13 blocks and was launched on 28 Nov 2024. [4][5]
• The first tranche's minerals were construction sand (Kerala), lime-mud (Gujarat), and polymetallic nodules and crusts (Andaman). [4][5][8][9]
• Winner selection uses a two-stage ascending forward e-auction, with the highest percentage of mineral value winning. [4]
• The upfront payment for a production lease is the lower of 0.5% of resource value or ₹100 crore. [4]
• The 2026 auction has 2 blocks in the Andaman Sea. [1]
• About 745 Mt of construction sand lies off the Kerala coast. [4][5]

8. Why the Seabed May Never Recover

• The Andaman blocks target minerals that take millions of years to form
• The cobalt, nickel and manganese here sit in polymetallic nodules and crusts. These are metal-rich lumps and layers on the seabed [4][5].

• Nodules grow over millions of years. Once they are removed, the habitat they provide is gone for good on any human timescale [14].

• Past experiments show almost no recovery

• A test-mining experiment in the late 1980s showed "virtually no recovery of the seabed more than 30 years later" [14].

• So the 50-year production lease [2] can do damage that lasts far longer than the lease.

• The harm spreads beyond the block itself

• Mining machines scrape the seabed and throw up sediment plumes (clouds of fine mud). These plumes can smother living things far from the mining site [14].
• Noise, and spills of fuel or toxic substances, add to the harm [14].
• A block boundary drawn on a map does not stop a plume. The Offshore Areas Mineral Trust pays for research on reducing harm [2], but research cannot put back a seabed that has been destroyed.

9. Licence First, Environmental Answer Later

• The auction takes place before anyone knows whether mining is safe
• A Composite Licence is exploration plus production in one grant [6].
• Rules 10(5) and 18(3) require environmental consents only before operations start [6], and that comes after the licence has been awarded.

• So a company wins the right first, and the environmental question is answered later.

• Why this order is a problem

• The winner will already have paid an upfront payment of up to ₹100 crore [4] and will have spent 3 to 5 years on exploration [2].
• Once that much money has gone in, it becomes hard to refuse clearance. Refusing may also lead to legal disputes.

• Exploration itself disturbs the seabed. Yet the clearances written into the rules are tied to starting operations, not to the licence stage [6].

• Selecting blocks does not replace an ecological assessment

• The government says the auction will bring "systematic exploration" [1]. This means the resource data needed to judge the ecological risk does not yet exist at the time of the auction.

10. The Case for Mining Anyway — and Where It Falls Short

• The strongest argument for the auction
• India imports most of its cobalt, nickel and rare earths. Without them, the EV (electric vehicle) and renewable-energy plans stall [1][12].
• Supply chains for these minerals are concentrated in a few countries. A domestic seabed source is a form of insurance [1].

• Auctions are more transparent than the old system, in which rights were given at the government's discretion [3].

• What is right about it

• Mineral security is a real strategic need. The National Critical Mineral Mission (NCMM, India's umbrella plan to secure supply of critical minerals) exists for this reason [12].

• Offering the Andaman blocks through open, competitive bidding is better than handing them out quietly.

• Where it falls short

• India already auctions critical minerals on land. For example, Tranche V sold 10 critical and strategic blocks, including potash for the first time [15]. These land blocks involve far less irreversible damage per tonne than the seabed.
• Seabed production cannot come quickly. Exploration alone runs 3 to 5 years [2], so the Andaman blocks do not solve the import problem in this decade.
• The honest position: the auction is a reasonable long-term option. It is not an urgent answer that justifies skipping ecological study.

11. What the World Has Decided on Seabed Mining

• The global regulator has not yet allowed commercial seabed mining
• The International Seabed Authority (ISA, the UN body that regulates mining on the ocean floor beyond national borders) has issued only exploration contracts for polymetallic nodules [14].

• India's Andaman blocks lie inside India's own offshore areas, so ISA rules do not apply to them. But India is moving to production-linked licences before the global body has done so.

• IUCN supports a pause

• IUCN (International Union for Conservation of Nature) backed Motion 069, which calls for a moratorium (a temporary ban) on seabed mining to protect deep-ocean ecosystems [14].

• The reason given is that biodiversity loss is "inevitable" and irreversible, and that the deep sea makes up about 90% of ocean habitat [14].

• Why this matters for India

• India presents itself as a responsible Blue Economy nation. If it mines its own seabed faster than the global rules allow, it weakens its voice in ISA talks on shared ocean areas.

12. What India Should Watch and Fix

• Ministry of Mines: publish what happened to the first tranche
• The 13-block tranche closed for bids in Feb 2025 [4], but no clear public result exists.

• If few bids came in, the Andaman offer needs a rethink before more blocks are put up. Repeating a failed design wastes time.

• MoEF&CC: require a baseline study before exploration, not just before production

• A baseline study records what lives on the seabed before any disturbance.

• Without it, no one can later measure how much damage mining caused, and Rule 18(3) consent becomes a paper exercise [6].

• Use the Offshore Areas Mineral Trust for monitoring that is independent of the company

• The Trust already funds research on ecological mitigation [2].

• Part of it should pay for monitoring of sediment plumes that the licence holder does not control. This follows the concern IUCN raised about plumes [14].

• Follow the ISA's caution as a benchmark

• Keep the Andaman blocks at the exploration stage until the ISA's global standards for commercial mining are in place [14]. This matches India's own law with the direction the rest of the world is taking.

13. Anchors for Answers

• Data: A late-1980s test-mining site showed virtually no seabed recovery more than 30 years later; nodules take millions of years to form [14]
• Data: Upfront payment for a production lease is capped at ₹100 crore or 0.5% of resource value, whichever is lower [4]
• Report/Committee: IUCN Motion 069 — moratorium on seabed mining to protect deep-ocean ecosystems [14]
• Law/Case: OAMDR Act, 2002, as amended in 2023 [2][3]; Offshore Areas Mineral (Auction) Rules, 2024 — Rules 10(5) and 18(3) (all consents needed before operations start) [6]
• Comparison: International Seabed Authority — has issued only exploration contracts for nodules beyond national borders, no commercial mining yet [14]
• Scheme: National Critical Mineral Mission — the umbrella plan that the offshore auctions feed into [12]; onshore critical-mineral Tranche V (10 blocks) as the land-based alternative [15]

14. Mains Relevance

• GS-III
• Infrastructure: energy, ports.
• Mobilisation of resources.
• Conservation and environmental impact assessment.

• Security challenges in border and maritime areas.

• GS-I: Distribution of key natural resources, including ocean resources.

• GS-II: Government policies and interventions; Centre–State relations for coastal states.
• Possible questions 1. "The 2023 amendment to the OAMDR Act marks a shift from discretion to competition in offshore mineral allocation. Examine its implications for India's critical-mineral security." (15 marks) 2. "Deep-sea and offshore mining can meet India's energy-transition needs but threatens fragile marine ecosystems. Discuss, with reference to the Andaman Sea." (10 marks) 3. "How can India balance the Blue Economy with the livelihoods of coastal communities? Illustrate using offshore mineral auctions." (15 marks)

15. Related Topics to Study Next

• National Critical Mineral Mission (NCMM): the umbrella policy for Co, Ni and REE security. [12]
• MMDR Act, 1957 and its 2023 amendment: the onshore counterpart; critical-mineral auctions. [10]
• Deep Ocean Mission (Ministry of Earth Sciences): polymetallic nodule exploration in the Central Indian Ocean Basin. (Not retrieved here.)
• International Seabed Authority (ISA) and UNCLOS: the regime for mining beyond national jurisdiction. (Not retrieved here.)
• Article 297 of the Constitution: resources in territorial waters, the continental shelf and the EEZ vest in the Union. (Verify from the Constitution text.)
• Blue Economy policy and Andaman & Nicobar strategic development: where resources and maritime security overlap.
• Coastal Regulation Zone (CRZ) and marine EIA: the environmental safeguards for offshore extraction.

16. Common Errors / Trap Areas

• Wrong ministry. The Ministry of Mines auctions offshore minerals. Oil and gas fall under the Ministry of Petroleum and Natural Gas. Deep-sea nodule R&D is Ministry of Earth Sciences work. [1]
• Wrong Act. Offshore minerals fall under the OAMDR Act, 2002, not the MMDR Act, 1957. [1]
• Wrong tenure. The offshore production lease is 50 years. The old limit of 30 + 20 years was replaced. [2]
• Wrong idea of the licence. A Composite Licence is exploration plus production, not exploration only. [6]
• Wrong first tranche. The first tranche was 13 blocks in Nov 2024. The Oct 2026 auction has 2 Andaman blocks. Don't mix up the counts. [1][4]