New Delhi: The Ministry of Mines has lowered the number of bidders needed for an offshore mineral auction to go ahead at the first attempt. The threshold is now two technically qualified bidders, down from three. The change is made through the Offshore Areas Mineral (Auction) Amendment Rules, 2026, notified on September 24. The rules came into force the same day.
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The amendment changes four provisions in rule 9 of the Offshore Areas Mineral (Auction) Rules, 2024, which govern the bidding process. The key change is to sub-rule (10). It previously said: "Where the total number of technically qualified bidders is less than three, then no technically qualified bidder shall be considered to be qualified bidder and the first attempt of auction shall be annulled." Under the amended rule, a first-attempt auction is annulled only if fewer than two bidders qualify.
The ministry proposed the change in October 2025, in a draft that also covered onshore mineral auctions. In its public consultation notice, it said the step was "crucial to improve the success rate of auctions in the first attempt which would help in reducing delays." Coal block auctions run by the Ministry of Coal have used a two-bidder threshold since June 2020.
India has tried to auction offshore mineral blocks once before. On November 28, 2024, the ministry launched its first tranche of 13 offshore mineral blocks auction. Seven were for polymetallic nodules and crusts in the West Sewell Ridge area off Great Nicobar Island in the Andaman Sea. The other six were construction sand and lime mud blocks in the Arabian Sea, off Kerala and Gujarat.
At the launch, Union Mines Minister G Kishan Reddy said the auction opened a new frontier. "This auction paves the way for harnessing the blue economy. With this, India joins an elite group of nations engaged in offshore mining," he said. He also pointed to the potential of India's exclusive economic zone, which he put at about 2.37 million sq km.
The response from bidders was thin. The deadline was extended from February 27, 2025 to April 2, 2025, and then again to May 1, 2025 after companies asked for more time to study the blocks. The government cancelled the auction in December 2025 because of a lack of interest.
The decision to reduce the number of technically qualified bidders from three to two for an auction to proceed is expected to help the government elicit interest from prospective bidders and complete the auction process.
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The rule change came three days after the ministry opened fresh seabed in the Andaman Sea. In a gazette notification dated September 21, the ministry declared two blocks covering 1,632 sq km available for composite licences to explore and mine polymetallic nodules and crusts. The notification was issued under Section 10 of the Offshore Areas Mineral (Development and Regulation) Act, 2002. It said the areas "shall be available for grant of composite licence."
The larger block is described as "West Sewell Ridge -01, Off Great Nicobar Island, Andaman Sea." It covers 1,000 sq km and is marked out by 26 boundary points. The second is "Sewell Rise-01, Great Nicobar Island, Southern part of Sewell Rise, Andaman sea", a 632 sq km rectangle. The notification says both are "for polymetallic nodules and crusts mineral."
A composite licence covers exploration first and then production, all under one concession. It was introduced when Parliament amended the Act in 2023. The same amendment made competitive bidding compulsory for granting composite licences and production leases to private entities. A licensee must complete exploration within three years, which can be extended by two. Once mineral resources are established, the licensee receives a production lease for the area.
Polymetallic nodules are rock deposits on the seabed that hold several metals together. The nodule blocks in the first tranche contained cobalt, copper, manganese and nickel. All four are used in batteries and other clean energy technology. Seabed nodules are also part of the government's plan for critical minerals. "Exploration will be expanded to offshore regions rich in polymetallic nodules containing cobalt, rare earth elements (REEs), nickel, and manganese," the government said in a 2025 backgrounder on the National Critical Mineral Mission (NCMM).
How much metal these areas hold has not been established. The ministry's tender material for the first tranche said "estimated resources have not been reported" for the West Sewell Ridge blocks. By contrast, it gave resource figures for the sand and lime mud blocks.
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