On eleventh October (Wednesday), the Union Cabinet chaired by Prime Minister Narendra Modi authorised the modification of the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957 (‘MMDR Act’). This would specify the speed of royalty with respect to three essential and strategic minerals, specifically, Lithium, Niobium, and Rare Earth Elements (REEs), a PIB assertion mentioned.
The fee of royalty mounted for these essential and strategic minerals is as follows –
(i) Lithium – 3% of London Metal Exchange (LME) worth,
(ii) Niobium –3% of the Average Sale Price (each for main and secondary sources),
(iii) Rare Earth Elements – 1% of the Average Sale Price of Rare Earth Oxide
The Cabinet’s resolution to specify the speed of royalty for these minerals will allow the Central Government to public sale blocks for Lithium, Niobium, and REEs for the primary time within the nation.
Taking to X, Union Minister for Coals and Mines, Pralhad Joshi highlighted that this resolution will permit the central authorities, for the primary time, to public sale these minerals. He additionally added that this resolution will entice energetic participation from the bidders and boast the financial actions which can be depending on these minerals within the coming days.
The cabinet headed by Prime Minister Shri @narendramodi Ji has authorised royalty charges for 3 essential minerals, together with Lithium and Niobium. This resolution will permit the central authorities, for the primary time, to public sale these minerals. This won’t solely entice energetic… pic.twitter.com/ABvoB58izO
— Pralhad Joshi (@JoshiPralhad) October 11, 2023
Hailing the choice, PM Modi acknowledged, “Today’s Cabinet decision is great news for the sector and will also boost economic activities.”
Today’s Cabinet resolution is nice information for the sector and also will enhance financial actions. https://t.co/jjOoe21VRc https://t.co/drWItXTUfW
— Narendra Modi (@narendramodi) October 11, 2023
It is essential to notice that the royalty fee on minerals is believed to be one of many essential monetary concerns for the bidders within the public sale of blocks. Further, the Ministry of Mines has additionally ready the style for calculation of the Average Sale Price (ASP) of those minerals which can allow the willpower of bid parameters.
Recently, the Mines and Minerals (Development and Regulation) Amendment Act, 2023 was handed by the Parliament. Subsequently, it got here into drive on seventeenth August 2023.
The Amendment delisted six minerals which included Lithium and Niobium, from the record of atomic minerals. With this, it allowed the grant of concessions for these minerals to the personal sector by means of public sale.
Further, the modification allowed the Central Government to public sale the mining lease and composite license of 24 essential and strategic minerals (that are listed in Part D of the First Schedule of the Act), together with Lithium, Niobium, and REEs (not containing Uranium and Thorium).
Notably, the royalty charges for varied minerals are offered within the Second Schedule of the MMDR Act. Under the earlier rule, if royalty charges for sure minerals weren’t talked about particularly, they had been set at 12% of the Average Sale Price (ASP) which might have pegged the royalty fee for Lithium, Niobium, and REE at 12% of the ASP, the default royalty fee. However, this royalty fee of 12% wouldn’t have been comparable with different mineral-producing nations and was significantly excessive in comparison with different essential and strategic minerals.
Further, the Geological Survey of India (GSI) and different exploration businesses have been conducting explorations to search out essential and strategic minerals within the nation and has
lately handed over the exploration report of REE and Lithium blocks.
The authorities is planning to quickly begin auctioning essential and strategic minerals like Lithium, REE, Nickel, Platinum Group of Elements, Potash, Glauconite, Phosphorite, Graphite, Molybdenum, and others.
Critical minerals have now change into indispensable for the nation’s financial development and nationwide safety. Minerals like Lithium and REEs, particularly, have gained immense significance in step with India’s dedication to vitality transition and reaching net-zero emissions by 2070. The strategic significance of minerals comparable to Lithium, Niobium, and REEs has grown attributable to their varied functions and the geopolitical panorama. Promoting home mining would scale back the necessity for imports and pave the way in which for the event of related industries and infrastructure initiatives. Moreover, this proposal is anticipated to spice up employment alternatives within the mining sector.
