The Union Ministry of Mines on Thursday launched an e-auction for the first time in India for offshore mineral blocks, including seven seabed blocks off the Great Nicobar Island in the Andaman Sea.

The island is the site of the contentious Rs 72,000-crore Great Nicobar Island Development Project.

The seven blocks to be auctioned are situated on the West Sewell Ridge east of the Great Nicobar Island. In addition, three blocks off the Gujarat coast near Porbandar and three near Kollam, off the Kerala coast, are also up for auction.

“This first tranche of auction includes 13 mineral blocks spanning across the Arabian Sea and Andaman Sea, featuring a mix of minerals, such as construction sand, lime mud and polymetallic nodules and crusts,” the ministry stated in a release.

Also read: On the Great Nicobar island, why the future is fearful

While the blocks near the Great Nicobar Island are rich in polymetallic nodules and crusts, the blocks off the Gujarat coast contain lime mud, an ingredient in cement-based mortars, and those off Kerala contain construction sand.

Polymetallic nodules and crusts are mineral deposits in the ocean that are rich in metals like lithium, cobalt, nickel, manganese and rare earth elements.

“These minerals are critical for infrastructure development, high-tech manufacturing and the green energy transition,” the ministry added in the release.

At the launch of the auction on Thursday, Ministry of Mines Secretary VL Kantha Rao said that the 13 blocks were selected after the Geological Survey of India explored half of the 6 lakh square kilometres it had identified as potential seabed mining areas, The Indian Express reported.

“After the data that we have generated and the exploration work that we have done, it is now most important that we bring the private industry into the mining of these metals,” the newspaper quoted him as saying.

“To make it very attractive for the industry, we have kept the royalty rates at a very minimum level,” Rao said. “We have selected some of the best blocks that are available, which are commercially viable and we are now looking for the industry partners who will come and partner with us in exploiting this mineral wealth, in making use of this mineral wealth for the economic development of the country.”

All 13 blocks are being auctioned under a composite licence, which requires winning bidders to carry out further exploration before beginning mining operations, according to the newspaper.

Tender documents would be available from December 3 and bids must be submitted by February 27. The reserve price for all blocks was set at 1%.

The Great Nicobar Island Development Project involves the construction of a Rs 36,000-crore trans-shipment port in addition to an international airport, a power plant, a township and tourism infrastructure spread over more than 160 square kilometres of land.

It was granted environmental clearance by the Centre on November 4, 2022. The project will subsume 166 square kilometres of the island’s total area of 921 square kilometres. Experts and researchers have raised serious concerns about the impact of the project on the environment and the indigenous communities of the island.

Also read: The proposed Rs 36,000-crore port in Great Nicobar may be economically unsound, experts warn