As part of a government initiative to secure the production of vital minerals through auctions projected to collect over $5 billion, India's Shree Cement intends to bid for the rights to mine lithium.

The company will seek for the rights to lithium mining blocks in Jammu and Kashmir, the federally managed territory where an estimated 5.9 million tonnes of reserves were found in February, according to a source with direct knowledge of the subject who spoke to Reuters.

Shree Cement, India's second biggest cement company by market capitalisation, will also bid for blocks in the eastern state of Chhattisgarh, said the source, who asked not to be identified due to the commercial sensitivities.

The move would be Shree Cement's first venture into mining and it has contacted Australia-based mining experts to work out details such as the premium that it should quote in its bid, the source added. The company is also seeking expert advice on the quality and grades of lithium reserves in Jammu and Kashmir.