(Bloomberg) -- India has started the process of auctioning some blocks of critical and strategic minerals that are crucial for the nation’s push to speed up energy transition and boost electric vehicle manufacturing capacity. 

The country has listed 20 blocks of lithium, nickel, graphite, molybdenum and rare earth elements among other minerals in the first tranche of auctions starting Wednesday, Mines Minister Pralhad Joshi said in New Delhi. The blocks are valued at 450 billion rupees ($5.4 billion), Joshi said. The auction process is expected to conclude Feb. 20 and the blocks are located in seven states including Bihar, Chhattisgarh, Gujarat and the Jammu & Kashmir region, he said.

The auctions are key to India’s ambitious plan of gradually moving away from fossil fuels to cleaner energy. That will drive demand for critical minerals, which are currently being imported, from electric vehicle makers and renewable power sectors. 

“In order to achieve this, government agencies such as the Geological Survey of India have shifted their focus to exploration and enhancing resource mapping of critical and deep seated minerals,” Joshi said. “India will remain committed to strengthen the global critical mineral supply chain through favorable policies and continued engagement through G20 and new multilateral partnerships.”

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India is offering $2.2 billion under a production-linked incentive plan to boost local battery cell production in what is seen as a move to stave off its heavy reliance on China. It has also made some swift rule changes ahead of the auctions to boost participation. The nation has allowed private players to mine critical minerals and imposed a lower royalty tax payable by miners. 

The auctions are expected to witness intense competition from foreign automakers as well as local firms. India’s top electric two-wheeler maker Ola Electric Mobility Pvt., billionaire Mukesh Ambani’s Reliance Industries Ltd. and bullion refiner Rajesh Exports Ltd. have already won state grants to produce batteries with a total capacity of 30 Gigawatt hours. 

Out of the 20 blocks to be auctioned, 16 will be for grant of composite licenses and the rest will be for mining leases, Joshi said. 

India has taken up 125 new critical mineral exploration areas in the current financial year ending in March, Mines Secretary V.L. Kantha Rao said at the same event. Apart from mining, India wants to encourage development of technologies for processing and recycling, he added.

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