Cabinet greenlights royalty rates for strategic minerals

In a significant move, the Union Cabinet, led by Prime Minister Narendra Modi, has approved royalty rates for three pivotal and strategic minerals. Lithium and niobium will have royalty rates set at 3%, while Rare Earth Elements (REEs) will have a rate of 1%. This decision paves the way for the Centre to conduct auctions for lithium, niobium, and REE blocks in India for the very first time.

Royalty rates play a crucial financial role for bidders participating in mine auctions. Additionally, the Centre has established a method to calculate the Average Sale Price (ASP) of these minerals, facilitating the determination of bid parameters.

This development aligns with India's commitment to energy transition and achieving net-zero emissions by 2070. Notably, these critical minerals are pivotal not only for economic development but also for national security. The decision is anticipated to stimulate employment within the mining sector.

Exploratory efforts for these critical minerals are underway through agencies like the Geological Survey of India. The Centre is also actively preparing for the inaugural round of auctions encompassing critical minerals such as lithium, REEs, nickel, platinum group elements, potash, glauconite, phosphorite, graphite, and molybdenum.