Centre Approves Royalty Rates for Key Minerals: Lithium, Niobium, and REEs


In a significant development, on 11th Oct, the Union Cabinet has granted approval for setting royalty rates for three critical and strategic minerals: lithium, niobium, and Rare Earth Elements (REEs).

The approved royalty rate stands at 3% each for lithium and niobium, while for REEs, it has been established at 1%.

Key Points

  • Empowering the Mining Sector: The Union Cabinet's decision involves the amendment of the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act).
  • Liberating Private Sector: The recent Mines and Minerals (Development and Regulation) Amendment Act, 2023, which came into effect on 17 August 2023, delisted six minerals, including lithium and niobium, from the list of atomic minerals.
  • Auctioning of Critical Minerals: The amendment now paves the way for the central government to auction mining leases and composite licenses for 24 critical and strategic minerals, including lithium, niobium, and REEs (not containing uranium and thorium).
  • Facilitating Auctions: The royalty rates are a crucial element in the auctioning of mineral blocks. They play a vital role in determining the commercial viability of mining operations.
  • Average Sale Price (ASP): The Ministry of Mines has developed a method to calculate the average sale price (ASP) of these minerals.
  • This calculation is instrumental in defining bid parameters and ensuring fair and transparent auctions.
  • Strategic Significance: Critical minerals, particularly lithium and REEs, are integral to economic development and national security.
  • These minerals are essential for India's commitment to energy transition and achieving the target of net-zero emissions by 2070.
  • Reducing Imports: Encouraging domestic mining of lithium, niobium, and REEs will reduce imports and stimulate the development of related industries and infrastructure projects.