India’s Ministry of Mines has announced that the country is entering offshore mineral production for the first time in its nearly 75-year history. This initiative aligns with India’s vision of becoming self-reliant and marks a new chapter in the country’s mining sector.
During 2023 and 2024, India has advanced its offshore mineral policy, and the Ministry has now initiated its Tranche 1 auction for offshore blocks located within India’s exclusive economic zone (EEZ), which spans 2.3 million km2.
The resources
According to the auction presentation material, the Geological Survey of India (GSI) has performed offshore mapping and exploration within the EEZ for decades. Within the seven blocks off the Great Nicobar Island in the Andaman Sea, GSI has demonstrated the presence of nodules and crusts through ROV visual inspections and chemical analysis of samples.
The resources found in these areas are expected to contain manganese, iron, nickel, cobalt, lead, and rare earth elements. The deposits occur at depths ranging from 500 to 1,500 m.
GSI emphasizes that nodules and crusts present a viable alternative to land-based mining, citing their high grades and the potential for reduced waste and environmental and human impact.
The auction process
Potential bidders must follow several steps during the auction process. In short, eligible bidders (only Indian nationals and registered Indian companies) will make technical bid submissions and an initial price offer, i.e. the percentage of mineral revenue they are willing to share with the government.
Next, a technical evaluation of the bids takes place. The top 50 % of the technically qualified bidders will then advance to the next stage. The highest initial price offer will establish the floor price for this next round, where selected bidders will participate in a live auction.
The bidder with the highest bid will be declared the preferred bidder. This bidder must then make upfront payments, secure environmental and regulatory clearances, and submit a production plan. Once these steps are completed, a development and production agreement will be signed, followed by the issuance of a production license.
Activities outside the EEZ
While large amounts of minerals can be expected to be found within India’s EEZ, the Indian Ocean may contain a much larger inventory. The Indian Ocean covers approximately 70 million km2, and areas outside of India’s EEZ are regulated by the International Seabed Authority (ISA).
The Indian government is actively involved in mapping parts of this vast region through a five-year initiative known as the Deep Ocean Mission.
To date, the ISA has awarded exploration contracts for sulfides and nodules to four contractors: The Government of India, the Federal Institute of Geosciences and Natural Resources (BGR, Germany), the Government of the Republic of Korea, and the China Ocean Mineral Resources Research and Development Association.
