Royalty Rationalisation to Boost Critical Mineral Output

New Delhi, Nov 12 (PTI) The government on Wednesday approved rationalisation of royalty rates of graphite, caesium, rubidium, and zirconium with an aim to boost domestic production and reduce import dependence.

The decision was taken by the Cabinet under the Chairmanship of Prime Minister Narendra Modi.

The decision will promote the 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, rare-earth elements (REE) and niobium.

Moreover, it would also strengthen the country's energy security and supply chain security.

I&B Minister Ashwini Vaishnaw said after the Cabinet meeting that there was a need to change the royalty structure of few critical minerals as a very high royalty was imposed on them.

The cabinet, he said, decided to reduce the royalty of caesium, graphite, rubidium and zirconium so that their production can be increased.

These elements have high usage in the country, specially in the electric vehicle, electronic manufacturing and strategic sectors, he explained.

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, an official statement said.

These four are important minerals for high-tech applications and energy transition. Graphite and zirconium are also among the 24 critical and strategic minerals listed in the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act).

Graphite is a crucial component in electric vehicle (EV) batteries, primarily serving as the anode material, which enables high conductivity and charge capacity.

However, India imports 60 per cent of its graphite requirement. At present, nine graphite mines are working in the country and further 27 blocks have been auctioned. Further, GSI and MECL have handed over 20 graphite blocks that will be auctioned and around 26 blocks are under exploration.

Zirconium is a versatile metal used in various industries, including nuclear energy, aerospace, healthcare and manufacturing, due to exceptional corrosion resistance and high temperature stability.

Caesium is mainly used in high-tech electronic sector, particularly in atomic clocks, GPS systems, other high precision instruments, medical instruments, including in cancer therapy.

Rubidium is used in making specialty glasses used in fibre optics, telecommunication systems, night vision devices, etc.

Recently, the Centre came out with a notice inviting tender for the sixth round of critical mineral block auction. This also contains five blocks of graphite, two blocks of rubidium and one block each of caesium and zirconium .

"Today's approval of the Union Cabinet on rate of royalty will help the bidders to rationally submit their financial bids in auction," it said.