A Promising Start with First-Ever Tungsten and Cobalt Block Auctions

India is taking its first strategic steps towards mineral independence, starting with the successful auctioning of tungsten and cobalt mineral blocks. Launched on June 24, this pioneering auction saw Hindustan Zinc Limited (HZL), a Vedanta Group subsidiary, emerge as the top bidder, securing mining rights for two tungsten blocks in Nayakkarpatti, Tamil Nadu, and Balepalyam, Andhra Pradesh, and a cobalt block in Shimoga, Karnataka. This win solidifies Vedanta’s position in India’s critical mineral exploration sector and marks a significant milestone for the country’s strategic resource management.

Understanding the Auction Process

The auction, held under the Mines and Minerals (Development and Regulation) Act of 1957, awarded composite licenses (CL) for all three blocks. A CL, or prospective-cum-mining license, is given for regions where preliminary exploration is complete but requires further exploration from mining companies to confirm deposit viability. Under this license, successful bidders like Vedanta must perform a thorough geological survey to validate mineral content. Once confirmed, they can apply to the state government for a mining lease. However, mining operations can only begin after obtaining all essential consents, permits, approvals, and no-objection certificates, ensuring that mining processes are both environmentally and socially responsible.

Why Tungsten and Cobalt Matter

Critical minerals like copper, lithium, nickel, and cobalt, along with certain rare earth elements, are essential for the world's transition to clean energy and high-tech solutions. Tungsten and cobalt are key among them:

1. Tungsten: Known as 'wolfram,' tungsten is indispensable in industries like electronics, aerospace, and medical devices due to its density and resistance to extreme temperatures. Despite its significance, India relies entirely on imports and recycling to meet its tungsten demands as no domestic production of tungsten ore exists. Currently, China dominates global tungsten production, accounting for over 85% of global output, with Russia and smaller players like Vietnam and Austria contributing the rest. India’s move toward domestic production reflects growing awareness of critical mineral supply chain risks and a proactive effort to reduce reliance on foreign sources.
2. Cobalt: Cobalt plays a crucial role in clean energy technologies, particularly in electric vehicle (EV) batteries, which require between 5.5 kg and 11 kg of cobalt each. The demand for cobalt is expected to triple by 2035, driven largely by the EV boom. Currently, the Democratic Republic of Congo (DRC) supplies around 67% of the world’s cobalt, but geopolitical concerns and ethical issues, such as child labor, raise questions about its future stability. Refining bottlenecks exacerbate the issue, as China controls around 66% of the world’s cobalt refining capacity. Although India has significant cobalt deposits in Odisha, Jharkhand, and Nagaland, it currently meets its cobalt needs entirely through imports, making the auctioned block in Karnataka a pivotal step toward domestic supply and reduced dependency.

Expanding India’s Reach: Beyond Domestic Reserves

India’s cobalt ambitions extend beyond land-based deposits. In a recent bid for seabed exploration rights, India applied to the International Seabed Authority (ISA) to explore the Afanasy Nikitin Seamount, a cobalt-rich area in the central Indian Ocean. However, competing claims from neighboring Sri Lanka have paused India’s application, highlighting the geopolitical complexities around critical mineral access. This push for seabed mining demonstrates India’s commitment to securing long-term mineral supplies, but international cooperation and diplomacy will be vital for success.

The Road Ahead

India’s journey to mineral independence is still in its early stages. With only a fraction of its strategic mineral reserves explored, India must ramp up exploration efforts to identify and secure essential resources. The recent tungsten and cobalt auctions are promising steps, yet, to meet growing future demand, India will need strong partnerships and agreements with friendly nations to build a robust and resilient supply chain. These partnerships will be crucial for bolstering India’s strategic reserves, diversifying its sources, and ensuring access to critical minerals in a rapidly changing global landscape.

India’s recent auction of tungsten and cobalt blocks is more than a success for the domestic mining sector; it is a foundational step in establishing mineral self-sufficiency, securing industrial supply chains, and advancing its clean energy goals. As India pushes forward, ongoing exploration, international partnerships, and sustainable practices will be key to transforming India into a global player in the critical minerals sector.