New Delhi: The government has approved royalty rates for mining of three critical and strategic minerals- Lithium, Niobium, and Rare Earth Elements (REEs). This will enable the Central Government to auction blocks for Lithium, Niobium, and REEs for the first time. 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 royalty rate would be three percent of London Metal Exchange price for Lithium, while the rate would be three percent of Average Sale Price for Niobium. Rare Earth Elements’ royalty rate would be one percent of Average Sale Price of Rare Earth Oxide.
In July this year, Parliament passed the Mines and Minerals (Development and Regulation) Amendment Act 2023. One of the major reforms of the Act is to introduce exploration licence for deep-seated and critical minerals. The proposed exploration license would facilitate, encourage and incentivize private sector participation in all spheres of mineral exploration for critical and deep-seated minerals. The Act delisted six minerals, including Lithium and Niobium, from the list of atomic minerals, thereby allowing the grant of concessions for these minerals to the private sector through auction.