The Cabinet has approved royalty rates for the mining of lithium, niobium, and rare earth elements (REEs), three vital and strategic minerals, on October 11.
According to a press release, the government will impose 'reasonable' royalty rates on these minerals: lithium will be subject to a rate of 3 per cent of the London Metal Exchange price, niobium will be subject to a rate of 3 per cent of the average sale price for both primary and secondary sources, and for REE, the rate will be 1 per cent of the average sale price of rare earth oxide, according to a report by Mint.
The news comes days after the Mines and Minerals (Development and Regulation) Amendment Act, 2023 came into being. Indian Parliament passed the Act on August 17, 2023.
Since these minerals would have been subject to a higher 12 percent rate of the average sale price absent particular provisions, the royalty rates were included.
A greater emphasis on clean energy driven by India's determination to achieve its net-zero emission target by 2070, has led to critical and rare minerals gaining prominence. These minerals will be used in battery tech, solar and other renewables.
India has been exploring ways to secure supplies of Lithium. Lithium happens to be a critical raw material used to make electric vehicle batteries.
The country found its first lithium deposits in Jammu and Kashmir in February 2023. The deposits have an estimated reserves of 5.9 million tonnes of lithium.
Rare earth elements (REEs) have varied usages in digital cameras, computer hard disks, smart phones, fluorescent and light-emitting-diode (LED) lights, among other things that mostly include electronic devices. Some REEs are used in big quantities for clean energy and defense technology purposes.