Coal India on Monday said it has emerged as the preferred bidder for Khattali Chotti graphite block in Alirajpur district of Madhya Pradesh, marking its foray into non-coal mineral mining.

The expansion is part of the diversification initiative of Coal India where the company is looking to go beyond coal mining and increase its presence across the mining and energy sector. The block was won under tranche 2 of the forward auction held by the Union ministry of mines on July 9.

“CIL won the bid quoting a minimum premium of 150.05 per cent of the value of mineral dispatch, which it would pay to the state of Madhya Pradesh,” said a statement from Coal India.

“With this, CIL is poised to play a supporting role in critical minerals domestically. Based on five bed rock samples from the Khattali Chhoti block, the fixed carbon ranges from 1.99 per cent to 6.50 per cent. The total area of the block is nearly 600 hectares,” the statement said.

CIL will formally receive the letter of intent once it deposits the performance security, and the composite licence will be issued one year after the company meets the formalities under NIT (notice inviting tender) timeline.

India imports about 69 per cent of its graphite needs — natural, synthetic and end-use products. At present, the graphite mining industry has limited players, and this offers space for willing players to venture into this business arena.

Graphite has its utility as an anode material in lithium-ion battery manufacturing because of its relatively low cost and energy density. With the electric vehicle market and energy storage systems fast gaining traction, where lithium-ion cells are used, graphite has a big market.

“Owning a graphite asset will give CIL an edge in powering green energy transition momentum to an extent,” the statement said.

Coal India said that the market size for graphite is projected to take a big leap with the absolute demand likely to shoot up at the rate of 25-27 per cent by FY2035 from the current level.

The Union ministry of mines on Monday said in a statement that it has successfully auctioned 14 blocks of critical and strategic minerals.

The ministry also said besides auction of critical minerals, to further boost exploration of critical and deep-seated minerals, a new mineral concession called Exploration Licence has been introduced for 29 deep-seated minerals mentioned in the newly inserted Seventh Schedule to the MMDR Act.

“The exploration licence granted through auction shall permit the licensee to undertake reconnaissance and prospecting operations for these minerals on receipt of revenue share once mining starts in the explored blocks,” the statement said.