The Lithium Block Nobody Bid For

In 2023 the Geological Survey of India established lithium resources in the Salal-Haimna block of Reasi district, Jammu and Kashmir. The figure that travelled was 5.9 million tonnes. It was read almost everywhere as India's entry into the battery-materials business, and as a Himalayan answer to a supply chain that runs through China.

The block has since been offered to the market twice. The first attempt was annulled because too few qualified bidders came forward to meet the three-bidder minimum. The second drew no bids at all. In March 2025 the Minister of Coal and Mines, G. Kishan Reddy, confirmed the second annulment in the Rajya Sabha, and added that the timeline for awarding lithium mining rights in Jammu and Kashmir remained uncertain and dependent on exploration still under way (The Tribune (opens in a new tab)).

Two auctions with no buyer is usually read as a verdict on the deposit. It is better read as a verdict on what was being sold.

What G3 actually offers a bidder

Mineral exploration runs through defined stages. G4 is reconnaissance. G3 is preliminary exploration. G2 is general exploration, and G1 is detailed exploration, at which point a company has drill density, continuity and a resource it can finance against.

Salal-Haimna has been explored to G3 (Greater Kashmir (opens in a new tab)). At that stage a resource is classified as inferred, which means its tonnage and grade are estimated from limited sampling and geological inference rather than from a drilled grid. Inferred resources cannot be converted into reserves without further work, and no lender anywhere prices an inferred resource as though it were a reserve.

So the 5.9 million tonne figure and the auction were describing different things. The figure described what might be in the ground. The auction asked a bidder to commit capital to finding out.

There is a further detail that explains a great deal, and it has been in the public record throughout. The Salal-Haimna programme was not a lithium programme. It was preliminary exploration for bauxite, and lithium and titanium were established as additional resources during that work. Two further G3 lithium projects, at Salal East and Panasa, were taken up in the 2024-25 field season.

A bidder reading that correctly sees a bauxite-hosted occurrence at the earliest useful stage of exploration, in a mineral where processing route decides economics. Declining to bid on those terms is not pessimism about India. It is ordinary underwriting.

Why Chhattisgarh sold and Reasi did not

The same round that failed in Reasi succeeded elsewhere. The Katghora lithium and rare earth block in Korba district, Chhattisgarh, was auctioned successfully. The legal basis was identical: the Mines and Minerals (Development and Regulation) Amendment Act, 2023, in force from 17 August 2023, inserted Section 11D and reserved the auction of critical and strategic mineral leases, lithium among them, to the Centre.

Same statute, same auction design, same mineral, two outcomes. What differed was the quality of the information attached to each block, and the cost of operating on each site. Korba is an established mining district with power, road access, a contractor base and a workforce that already does this work. Reasi is a Himalayan district where the same tonnage carries a different capital cost before a single tonne moves.

This is the part of the story most worth holding on to. India's critical mineral problem in the Himalaya is not an absence of geology. It is the distance between a geological announcement and an auctionable asset, and that distance is measured in drill metres, metallurgical test work and access roads.

The question the samples were sent to answer

Lithium economics are decided less by how much lithium is present than by how hard it is to get out. Hard-rock spodumene, brine and clay-hosted deposits each demand a different processing route, with different capital intensity and different recovery rates. A deposit can carry a respectable grade and still fail on beneficiation.

GSI sent samples from Salal-Haimna to the Indian Bureau of Mines in Nagpur and to the Institute of Minerals and Materials Technology in Bhubaneswar for beneficiation studies. Asked about the block, the minister did not offer a view on quality. He said the auction of lithium blocks in Jammu and Kashmir depends on the reports of the exploration investigations under way.

That is the correct answer, and it is also the admission that matters. Until the beneficiation work is published, nobody outside the system can model a processing route, and anybody bidding is pricing an unknown they have no way to bound. The absence of bids is the market saying so.

What would clear the block

Four things would change the arithmetic, and none of them requires a new policy.

Take the block to G2 before offering it again. An inferred resource at G3 asks a bidder to fund the exploration risk and the mining risk together. Carrying the block to general exploration at state cost transfers the cheaper half of that risk to the party best able to absorb it, and converts the auction from a bet into a valuation exercise. Australia and Canada both routinely bring public geoscience further up the maturity curve before private capital is asked to commit.

Publish the beneficiation results, whatever they say. A disappointing recovery rate that is public is worth more to the market than a promising one that is not, because it lets a bidder price the deposit rather than guess at it. If the metallurgy is difficult, the block should be offered on terms that reflect difficult metallurgy.

Price the Himalayan cost premium into the terms rather than the silence. Reasi is not Korba, and pretending otherwise in a common auction template produces exactly the result it has produced. Road access, power and the seasonal working window are costs a bidder will model whether or not the tender acknowledges them.

Separate the minerals. Salal-Haimna is a lithium, titanium and bauxite block. A composite offer forces a bidder to value three minerals with three processing routes and three markets, and to be the best bidder on all of them at once. That narrows the field before a single technical question is asked.

The wider point

India's critical minerals programme has moved quickly at the level of statute and intent. Section 11D created the auction route. The National Critical Mineral Mission set the direction. Blocks have been put up in volume, and a majority of them have found bidders. Measured against where the country stood in 2022, the direction of travel is right.

What Reasi shows is that the binding constraint has moved. It is no longer the legal authority to auction a lithium block, nor the willingness of the state to do it. It is the maturity of the geological information the state brings to the table, and that is a budget line and a field season rather than a reform.

The Himalaya will be asked this question repeatedly. Jammu and Kashmir, Himachal Pradesh, Uttarakhand and Arunachal Pradesh sit on terrain that has never been systematically explored to modern standards for anything other than hydropower. As the critical minerals list lengthens, more blocks will come up, and each will meet the same test: can a bidder price this, or is it being asked to fund the survey.

A block that attracts no bids has not failed. It has returned information, at no cost to the exchequer, about what the market needs to see. The useful response is to go back to the field and get it.