The Central government has approved the lithium mining auction proposal, clearing the way for private companies to be able to participate, CNBC Awaaz reported on Wednesday.

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The Cabinet has approved the amendment in the Mines and Minerals (Development and Regulation) (MMDR) Act. The Centre has lifted the ban on mining lithium and five other minerals. Private companies will also be able to mine the six minerals.

Lithium is the lightest and softest metal in the world. The mineral converts the chemical energy it stores into electrical power. Lithium is a non-ferrous metal and is one of the critical components for batteries that power electric vehicles.

Earlier this year, India discovered 5.9 million tonne worth of lithium reserves in Jammu and Kashmir. The amount of lithium is important for the country because it can compete with the global average.

At present, 47 percent of the world's lithium is produced in Australia, 30 percent in Chile and 15 percent in China. India has been import-dependent on many minerals like lithium, nickel and cobalt and has lately been looking to strengthen its supply of key minerals, including lithium, that will be critical for furthering its electric vehicle plans.

India is hopeful of finding more lithium reserves in Jammu & Kashmir as the additional exploration activity is underway in the Salal-Hamima region in Reasi, Secretary of the Ministry of Mines, Vivek Bharadwaj, said last month. He also indicated that the auction of the discovered lithium ore is likely to take place in December and the ministry is in the process of working out the reserve price.

Last month Australian billionaire Gina Rinehart also entered the lithium space after her mining company Hancock Prospecting inked an agreement with Legacy Iron Ore and Hawthorn Resources to explore the mineral at the Mount Bevan project in Western Australia. India's National Mineral Development Corporation (NMDC) holds a 90 percent stake in Legacy Iron Ore, according to the firm's 2022 annual report.

Also Read: Top three companies in India which mine lithium

First Published:Jul 12, 2023 1:32 PM IST