Ministry of Mines Launches the Ninth Tranche of Critical Mineral Block Auction and the Third Tranche of Exploration Licence Auction; Unveils Landmark Reform

1. At a Glance

• On 05 Nov 2026 the Ministry of Mines launched two auction rounds. Tranche IX offers 20 critical and strategic mineral blocks. Tranche III of Exploration Licence (EL) auctions runs alongside it. [1]
• The headline reform is the Mineral (Auction) Third Amendment Rules, 2026. It cuts the minimum number of Technically Qualified Bidders (TQBs) needed for the second round from 3 to 2 for Part D minerals. The goal is fewer unsold blocks. [1]
• Why it matters for UPSC: critical minerals are needed for clean energy, electric vehicles, defence, aerospace, electronics and fertilisers. That ties the topic to the energy transition, mineral security and supply-chain strategy (GS-III), and to how auctions are designed (governance). [1]
• The auctions sit inside the larger National Critical Mineral Mission (NCMM). Its target is 1,200 exploration projects and more than 100 critical mineral blocks auctioned. [2][6]

2. Why in the News

• 05 Nov 2026: Tranche IX (20 blocks) and EL Tranche III launched. Tranche IX minerals include graphite, vanadium, gallium, titanium, rare earth elements (REE), bauxite, tungsten and potash. [1]
• 16 Oct 2026: the Mineral (Auction) Third Amendment Rules, 2026 were notified. They lower the TQB threshold from 3 to 2 for the second round (Part D minerals). [1]
• Letters of Intent (LoIs) are now issued automatically through the Unified Mining Portal. [1]
• Track record: the first eight tranches put 100 unique blocks up for auction and 64 were sold, a 64% success rate. The two EL tranches so far auctioned 11 blocks. [1]

3. Background & Evolution

• Legal origin: the MMDR Amendment Act, 2023 created the EL regime, allowing auctioned licences for critical and deep-seated minerals. [2]
• Section 10BA of the MMDR Act provides for private exploration of the 29 Critical and Deep-Seated Minerals listed in the Seventh Schedule. [1][2]
• Rationale: bring in private capital and technology for exploration before mining starts. This widens the pipeline of future mines and cuts import dependence. [1]
• Milestones (chronological):
• Tranche V: 10 blocks auctioned, including 2 potash blocks, the first ever auctioned in India. [4]
• Before the first EL tranche: Union Minister G. Kishan Reddy announced it was coming soon. [7]
• 13 Mar 2025, Goa: EL Tranche I launched with 13 EL blocks, covering REE, zinc, diamond, copper and Platinum Group Elements (PGE). [2][5]
• Sept 2025: Tranche VI of critical mineral auctions launched with 23 blocks. [3]
• EL Tranche II: took cumulative EL blocks auctioned to 11. It brought the EL framework to Arunachal Pradesh, Uttar Pradesh and Odisha for the first time. [2][5]
• 23 Mar 2026: Notice Inviting Tender issued for Tranche VII, offering 19 blocks. 10 were auctioned, taking the cumulative total to 56 of 88 unique blocks (~63%). It included the first critical mineral block auctions in Gujarat, Uttarakhand and Telangana. [2]
• Tranche VIII: the cumulative figure rose to 64 of 100. This implies 8 more blocks sold and 12 new unique blocks offered. [1][2]

• 16 Oct 2026: Third Amendment Rules notified. 05 Nov 2026: Tranche IX and EL Tranche III launched. [1]

• Earlier reforms: the Mineral (Auction) Second Amendment Rules, 2025 and Insurance Surety Bonds, both meant to ease doing business and build investor confidence. [1]

• NCMM covers FY 2024-25 to FY 2030-31. [6]

4. Core Static Facts

Auction formats (frequently tested):

5. Multi-Dimensional Analysis

Economic

• Converting 64 of 100 blocks still leaves about a third unsold. The 3→2 TQB cut goes after a key reason for failed auctions: not enough technically qualified bidders. [1]
• In the EL model, the explorer takes a share of the future miner's revenue. This lets explorers earn from discovery risk even without mining themselves. [1]
• Potash blocks (first auctioned in Tranche V, offered again in Tranche IX) bear on India's dependence on fertiliser imports. [1][4]

Geopolitical / Strategic

• REE, gallium, graphite, tungsten and vanadium are minerals with concentrated global supply chains. Finding domestic sources supports mineral security. [1]
• These minerals feed into the defence, aerospace and electronics value chains. [1]

Legal / Constitutional

• Statutory base: MMDR Act, Section 10BA and the Seventh Schedule (EL). The auctions run under the Mineral (Auction) Rules, changed through successive amendment rules (2025, 2026). [1][2]

Administrative / Governance

• Automatic LoIs through the Unified Mining Portal and online bidding on MSTC reduce discretion and delay, which helps transparency. [1]
• Spreading auctions to new states, such as Gujarat, Uttarakhand and Telangana (critical blocks) and Arunachal Pradesh, UP and Odisha (EL), widens how many states take part. [2]
• Trade-off: a lower bidder threshold means less competition in the second round. Revenue discovery may suffer in exchange for fewer unsold blocks.

Scientific / Technological

• Deep-seated and critical minerals need advanced exploration methods. The EL Tranche I launch was paired with an AI-based mineral-targeting hackathon (2025). [5]

Environmental

• The minerals underpin clean energy and electric mobility. But new mining in ecologically sensitive or tribal regions brings forest-clearance and displacement concerns. These are analytical points, not drawn from the release.

6. Recent Developments (last 12–18 months)

• Sept 2025: Tranche VI launched with 23 blocks. [3]
• EL Tranche II: cumulative EL blocks reached 11; framework extended to Arunachal Pradesh, UP and Odisha. [2][5]
• 23 Mar 2026: Tranche VII NIT (19 blocks). Result: 10 auctioned, cumulative 56 of 88. [2]
• Tranche VIII: cumulative 64 of 100 (64%). [1]
• 16 Oct 2026: Mineral (Auction) Third Amendment Rules, 2026 notified. [1]
• 05 Nov 2026: Tranche IX (20 blocks) and EL Tranche III launched. [1]

7. Prelims Hooks

• Exploration Licence is provided under Section 10BA of the MMDR Act. [1]
• EL covers 29 Critical and Deep-Seated Minerals in the Seventh Schedule. [1]
• The EL regime was introduced by the MMDR Amendment Act, 2023. [2]
• Critical mineral blocks (CL/ML) are sold by two-stage ascending forward auction; the highest revenue share wins. [1]
• EL blocks are sold by two-stage descending reverse auction; the lowest share of the future lessee's revenue share wins. [1]
• The Mineral (Auction) Third Amendment Rules, 2026 were notified on 16 Oct 2026. [1]
• Minimum TQBs for the second round (Part D minerals) cut from 3 to 2. [1]
• Tranche IX offers 20 blocks, including gallium, tungsten, vanadium, REE and potash. [1]
• 64 of 100 unique blocks were auctioned across Tranches I–VIII. [1]
• India's first EL auction was launched on 13 Mar 2025 in Goa with 13 blocks. [2]
• The first potash blocks auctioned in India came in Tranche V. [4]
• Tranche VII brought the first critical mineral block auctions in Gujarat, Uttarakhand and Telangana. [2]
• NCMM targets 1,200 exploration projects; it runs FY 2024-25 to 2030-31. [2][6]
• LoIs are issued automatically through the Unified Mining Portal; auctions run on MSTC. [1]

8. Why Blocks Failed: Too Few Bidders, Not Too Few Minerals

• Most failed auctions failed on the bidder count, not the geology
• In Tranche I, the e-auction for 13 blocks was cancelled (annulled) on 13 March 2024 [8].
• 2 blocks got no bids at all. The other 11 had fewer than 3 Technically Qualified Bidders (TQBs), meaning firms that passed the technical and financial checks [8].

• So 11 of the 13 failures were caused by the 3-bidder rule alone. The Third Amendment changes exactly that rule.

• Each failure costs a year, not just one sale

• 7 of those 11 cancelled blocks had to be offered again in Tranche III [8].

• One unsold block means a fresh notice, fresh bids and fresh checks. The country waits all that time for a mineral it is trying to stop importing.

• The 3-bidder rule was relaxed once before

• Under the original rules, an auction with fewer than 3 bidders was cancelled and repeated for at least 3 rounds. Flexibility came only in the 4th round [9].
• The 2017 amendments allowed the second round to go ahead with fewer bidders for ordinary blocks [9].

• The 2026 change brings the same logic to Part D (critical and strategic) minerals, with a floor of 2 bidders.

• Why so few firms qualify for critical minerals

• Few Indian companies have experience with gallium, vanadium or rare earths. Many blocks are also not well explored, so the risk is high.
• A parliamentary committee found most of India's bauxite resources were still unexplored. It asked the Ministry to upgrade unproven reserves into proven ones [10].
• When the data on a block is weak, careful firms stay away. A lower bidder threshold cannot fix that. Better exploration data can.

9. Does Two Bidders Mean a Weaker Price? The Case Against, and the Answer

• The strongest objection: two bidders compete less than three
• In an ascending forward auction (bids go up; the highest revenue share to the state wins), prices rise only when rivals push each other.
• With just two bidders, one strong firm may face one weak rival. The winning bid can stay close to the opening price.
• Two firms also find it easier to quietly agree not to compete (collusion) than three do.

• Mineral revenue goes to the state government. So the state, not the Centre, carries any loss.

• The answer: an unsold block earns nothing

• A block that sold to two bidders still earns a revenue share. A cancelled block earns zero and goes back in the queue [8].

• The rule applies only in the second round, after the first round has already failed to attract 3 bidders [1]. The block has already tested the market once.

• What the critics get right

• No public data shows whether two-bidder rounds give lower premiums than three-bidder rounds. Without that data, nobody can check the trade-off.
• Ministry of Mines should publish bid premiums for each block, along with the number of TQBs. Then CAG or a parliamentary committee can test whether the 2-bidder rule is costing states revenue.

10. Selling a Block Is Not the Same as Mining It

• The 64% success rate counts sales, not mines
• A block counts as "auctioned" once a winner is named. The mineral comes out only after the mining plan, environment clearance and lease signing.

• Until October 2025, the rules gave a single broad 3-year window from Letter of Intent (LoI) to lease. There were no checkpoints in between, so problems were found too late to fix [11].

• New deadlines now come with a penalty

• For a mining lease: 6 months for mining-plan approval, 18 months for environment clearance and 12 months to sign the lease [11].
• If the bidder causes a delay, its performance security (a deposit held by the government) is cut by 1% for each month of delay [12].

• A Mining Dashboard set up on 4 June 2025 tracks clearances and delays for auctioned blocks [12].

• Forest land is still the slowest step

• A 2026 rule change allows the extra 2-year extension only for blocks that involve forest land [13]. The government itself expects forest blocks to take longest.

• The Standing Committee on Coal, Mines and Steel said forest clearance is needed even at the exploration stage. This slows down the very step the Exploration Licence (EL) regime is meant to speed up [10].

• What the committee asked for

• An inter-ministerial group to track critical mineral projects after the auction. It also wanted rewards for producing early and penalties for delay [10].
• The penalty half now exists [12]. The cross-ministry group, which would bring Mines and Environment clearances together, does not yet appear in the rules.

11. Mining at Home Does Not End Dependence on China

• China controls the minerals Tranche IX is chasing
• China produced about 98% of the world's primary gallium in 2023 [14].
• It produced 79% of the world's natural graphite and 68% of mined rare earths [14].

• So when China limits exports, buyers have few other places to go.

• Ore without a refinery still has to go abroad

• Rare earth ore is useless until it is separated and refined into single elements. If India mines ore but cannot refine it, the ore may still be sent abroad for processing.

• The Standing Committee urged faster domestic refining capacity and technology tie-ups with other countries, especially for rare earths [10].

• Some gaps no Indian block can fill soon

• The committee found India fully import-dependent for lithium, cobalt and nickel, and largely dependent for graphite and potash [10].

• For these, domestic auctions must work alongside overseas assets and recycling. The committee asked for minerals to be recovered from e-waste, used batteries and scrap [10].

• What should follow: the Ministry of Mines should report how many auctioned blocks have a buyer or refinery lined up, not just how many were sold.

12. When a Block Is Auctioned Before the Land Is Checked

• Nayakkarpatti shows the cost of late checks
• The Nayakkarpatti tungsten block in Tamil Nadu was auctioned as a critical mineral block [15].
• In January 2025, the Ministry cancelled it because part of the block lay inside a Biodiversity Heritage Site (an area protected under the Biological Diversity Act, 2002) [15].

• The block was chosen for its geology. Its ecological status became a problem only after the auction. Time was lost, and bidder confidence suffered.

• Tranche IX faces the same risk

• Several Tranche IX minerals, such as bauxite, graphite and REE, are found in forest and tribal belts.

• In those areas, the Forest Rights Act, 2006 and PESA (gram sabha consent in Scheduled Areas) can stop or delay a project after it has been auctioned.

• The fix is to check land first, then auction

• The Ministry of Mines and state governments should screen each block against protected-area, Biodiversity Heritage Site and forest maps before the Notice Inviting Tender.
• Blocks that overlap protected land should be flagged in the tender papers or held back. Bidders then know the real risk, and the auction is not wasted.

13. Anchors for Answers

• Data: 13 Tranche I blocks annulled: 11 for having fewer than 3 TQBs and 2 for getting no bids. 7 were re-offered in Tranche III [8]
• Data: China's share of world output in 2023: gallium ~98%, natural graphite 79%, mined rare earths 68% [14]
• Data: performance security cut by 1% for each month of delay caused by the bidder. Milestones of 6 / 18 / 12 months for mining plan / environment clearance / lease [11][12]
• Report/Committee: Standing Committee on Coal, Mines and Steel, Self-Reliance in Minerals and Metals (Dec 2025). It flagged forest clearance at the exploration stage and post-auction delays, and called for an inter-ministerial monitoring group, refining capacity and recycling [10]
• Law/Case: MMDR Act, Section 10BA (EL). Mineral (Auction) Rules, 2015, with the 2017 relaxation of the 3-bidder rule [9]. Biological Diversity Act, 2002 (Biodiversity Heritage Sites), as in the Nayakkarpatti annulment [15]. Forest Rights Act, 2006 and PESA, 1996
• Comparison: the 2017 amendment for ordinary minerals allowed second-round allocation with fewer than 3 bidders. The 2026 rule applies the same idea to Part D critical minerals [9][1]
• Scheme: National Critical Mineral Mission, which pairs domestic auctions with processing and recycling. Mining Dashboard (June 2025), which tracks post-auction delays [12]

14. Mains Relevance

• GS-III: Indian economy (mobilisation of resources, infrastructure, energy), distribution of key natural resources, and security (strategic supply chains).
• GS-I: distribution of key natural resources across India.
• GS-II: government policies and interventions; transparency in governance.
• Question stems: 1. "Critical minerals are the new oil." Examine India's institutional framework for securing critical minerals, with reference to the auction and Exploration Licence regimes. (15 marks) 2. 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. (10 marks) 3. How does the Exploration Licence regime change the role of private capital in India's mineral exploration? Discuss its potential and limitations. (15 marks)

15. Related Topics to Study Next

• National Critical Mineral Mission (NCMM): the umbrella mission these auctions serve.
• MMDR Act, 1957 and its 2015, 2021 and 2023 amendments: how India moved from discretionary allotment to auctions.
• Rare Earth Elements and China's export curbs: the strategic reason for Tranche IX's REE and gallium blocks.
• KABIL (Khanij Bidesh India Ltd) and overseas mineral assets: India's outward strategy to complement domestic auctions.
• Minerals Security Partnership and the Quad critical-minerals initiative: the multilateral supply-chain angle.
• National Mineral Exploration Trust (NMET) and the Geological Survey of India: the public exploration bodies that work alongside private EL holders.
• Energy transition and battery value chains (ACC PLI, lithium): where demand for these minerals comes from.
• Forest Rights Act, PESA and mining: the social and environmental limits on new blocks.

16. NCERT Concepts to Revise

• National Critical Mineral Mission (Geography): The umbrella mission these auctions serve, with targets for exploration projects and blocks auctioned.
• Critical minerals (Economy): The core subject: minerals vital for clean energy, defence and electronics, whose supply can be disrupted.
• MMDR Amendment Act 2023 (Geography): Created the Exploration Licence regime and let the Centre auction critical minerals, the legal base of these auctions.
• Rare earth elements (Geography): A key Tranche IX mineral, where China's dominance drives India's push for domestic sources.
• Forest Rights Act 2006 (Polity): Forest and tribal rights can delay or stop auctioned blocks, a main post-auction risk.
• Import dependence (Economy): Domestic auctions aim to cut India's reliance on imported critical minerals and potash.

17. Common Errors / Trap Areas

• Mixing up auction formats: critical blocks use a forward (ascending) auction where the highest bid wins. EL uses a reverse (descending) auction where the lowest bid wins. [1]
• Mixing up schedules: EL minerals are in the Seventh Schedule (29 minerals). The TQB reform applies to Part D minerals. Don't treat these as the same list. [1]
• Wrong numbers: the TQB cut is 3→2, not 2→1. The cumulative figure is 64/100 after eight tranches, not 56/88, which was the post-Tranche VII figure. [1][2]
• Wrong amendment: this is the Third Amendment Rules 2026, not the Second Amendment Rules 2025 (an earlier ease-of-business reform). [1]
• EL ≠ mining right: EL is for exploration only. Mining comes later, through a separate lessee. [1]