Cabinet approves royalty rate rationalisation for four critical minerals

The Union Cabinet has approved the rationalisation of royalty rates for four critical minerals essential for green energy applications and high-tech industries. The revised royalty rates for caesium is at 2% of average sale price on metal content, graphite at 2-4% on ad valorem basis depending on carbon content, rubidium at 2% on metal content contained in the ore produced, and zirconium at 1% on metal content.

The decision of the Union Cabinet will promote auction of mineral blocks containing Caesium, Rubidium and Zirconium thereby not only unlocking these minerals but also associated critical minerals found with them, such as Lithium, Tungsten, REES, Niobium etc. Fixing of royalty rates of Graphite on ad valorem basis will proportionately reflect the change in prices of the mineral across grades. Increase in indigenous production of these minerals would lead to reduction in imports and supply chain vulnerabilities and also generate employment opportunities in the country.

Graphite, a crucial component in electric vehicle batteries serving as anode material, currently sees India importing 60% of its requirements. The country currently operates nine graphite mines, with 27 blocks successfully auctioned and an additional 20 blocks prepared for auction by the Geological Survey of India and Mineral Exploration Corporation Limited.

The royalty rate for graphite has been shifted from a per-tonne basis to an ad valorem structure to reflect price variations across different grades. It remains the only mineral among the 24 critical and strategic minerals listed in the Mines and Minerals (Development and Regulation) Act, 1957, that previously had tonnage-based royalty.

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