New Delhi: In a significant move towards bolstering India’s mineral sector, the Union Cabinet, has approved amending the Second Schedule to the Mines and Minerals (Development and Regulation) Act, 1957 (‘MMDR Act’). The amendment focuses on specifying the royalty rates for 12 critical and strategic minerals, including Beryllium, Cadmium, Cobalt, Gallium, Indium, Rhenium, Selenium, Tantalum, Tellurium, Titanium, Tungsten, and Vanadium.
This development marks the completion of the rationalization of royalty rates for all 24 critical and strategic minerals identified by the government. Notably, the Mines and Minerals (Development and Regulation) Amendment Act, 2023, categorized these minerals under Part D of the First Schedule of the MMDR Act, facilitating their auction by the Central Government.
Earlier, the government had notified royalty rates for four critical minerals on March 15, 2022 (Glauconite, Potash, Molybdenum, and Platinum Group of Minerals) and three critical minerals on October 12, 2023 (Lithium, Niobium, and Rare Earth Elements). The recent approval now enables the Central Government to auction blocks for the remaining 12 minerals for the first time in the country.
Royalty rates play a crucial role in financial considerations for bidders participating in the auction of mineral blocks. The amendment empowers the government to specify these rates, ensuring a fair and competitive environment for the bidding process. Additionally, the Ministry of Mines has devised a method for calculating the Average Sale Price (ASP) of these minerals, providing clarity on bid parameters.
The move comes in line with India’s commitment to promoting indigenous mining, reducing imports, and fostering the growth of industries and infrastructure related to critical minerals. The proposal is expected to generate employment opportunities in the mining sector, aligning with the government’s focus on economic development and national security.
Critical minerals like Cadmium, Cobalt, Gallium, Indium, Selenium, and Vanadium are integral to technologies such as batteries, semiconductors, and solar panels, contributing significantly to India’s energy transition goals. The amendment is a strategic step towards securing a stable and self-reliant supply chain for these minerals, essential for India’s economic progress and its transition to sustainable energy solutions.
The exploration reports for 13 blocks containing one or more critical minerals, including Cobalt, Titanium, Gallium, Vanadium, and Tungsten, have been submitted by the Geological Survey of India (GSI) and Mineral Exploration & Consultancy Ltd. (MECL). These agencies are actively conducting exploration activities for critical and strategic minerals across the country.
The government had previously initiated the auction of critical and strategic mineral blocks in November 2023, covering minerals like Lithium, Rare Earth Elements, Nickel, Platinum Group of Elements, Potash, Glauconite, Phosphorite, Graphite, and Molybdenum. The auction has garnered positive responses from the industry, with a total of 20 mineral blocks being auctioned in the first tranche. The last date for bid submission was February 26, 2024, marking a significant stride towards boosting the mineral sector in the country.