The Cabinet of Ministers on Wednesday approved the royalty rates for mining of three strategic minerals—lithium, niobium and rare earth elements (REEs).
The move is expected to encourage indigenous mining, reduce imports and set up related industries and infrastructure projects, along with creating employment opportunities in the mining sector, according to a press release on the matter.
The royalty rates would be as follows:
Lithium: 3% of the London Metal Exchange price
Niobium: 3% of the average sale price (both for primary and secondary sources).
REE: 1% of the average sale price of rare earth oxide.
"Today's approval of the Union Cabinet of specification of rate of royalty will enable the Central Government to auction blocks for Lithium, Niobium and REEs for the first time in the country," the release said.
During the previous parliamentary session on Aug. 17, the Mines and Minerals (Development and Regulation) Amendment Act, 2023, was passed, which allowed for the delisting of six minerals from the list of atomic minerals. This would allow concessions for these minerals to the private sector through auction.
Through the amendment, the mining lease and composite licence of 24 critical and strategic minerals, including lithium, niobium and REEs (not containing uranium and thorium), can be auctioned by the government.
"Critical minerals such as Lithium and REEs have gained significance in view of India's commitment towards energy transition and achieving net-zero emission by 2070," the release said.
The government is expected to shortly launch the first tranche of the auction of critical and strategic minerals such as lithium, REE, nickel, platinum group of elements, potash, glauconite, phosphorite, graphite, and molybdenum.
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