In the ever-pressing quest for a cleaner, more sustainable future, India has just taken a significant step forward, one that resonates not only domestically but also globally. In a pivotal decision, the Union Cabinet has approved an amendment to the Mines and Minerals (Development and Regulation) Act, 1957, setting the stage for a profound transformation in India’s energy landscape. The amendment specifically relates to the Second Schedule of the Act and pertains to the specification of royalty rates for three critical and strategic minerals: Lithium, Niobium, and Rare Earth Elements (REEs). This decision comes in the wake of a landmark amendment to the Mines and Minerals (Development and Regulation) Act which took effect this August. That amendment delisted six minerals, including Lithium and Niobium, from the category of atomic minerals, enabling their auction to the private sector.
The latest amendment builds on this foundation, facilitating the auction of mining leases and composite licences for 24 critical and strategic minerals, including Lithium, Niobium and REEs not containing Uranium and Thorium. What makes this development truly remarkable is the determination to promote sustainable practices in mining and mineral extraction. India’s commitment to adhering to stringent environmental and social standards reflects its dedication to a holistic approach to sustainability. Responsible mining practices protecting local communities and the environment are non-negotiable components of this strategy. Another distinctive feature of the Cabinet’s decision is the specification of reasonable royalty rates for these critical minerals. Lithium, with its importance in electric vehicle (EV) batteries, is assigned a royalty rate of 3 per cent of the London Metal Exchange price. Niobium, a mineral crucial for various industries, is set at 3 per cent of the Average Sale Price. REEs, often described as the vitamins of industry due to their widespread use, will have a royalty rate of 1 per cent of the Average Sale Price of Rare Earth Oxide. This move ensures fair competition and provides financial considerations for potential bidders.
Critical minerals, such as Lithium and REEs, have assumed greater significance in the context of India’s commitment to clean energy transition and the ambitious goal of achieving net-zero emissions by 2070. They have also gained strategic importance due to their diverse applications and the evolving geopolitical landscape. India’s decision to auction its lithium reserves found in Jammu and Kashmir underscores its proactive approach to securing critical minerals. It not only reduces import dependence but also catalyses the growth of related industries and infrastructure projects, thereby creating jobs in the mining sector. The Geological Survey of India (GSI) has been instrumental in these developments. GSI recently provided an exploration report on REE and Lithium blocks, marking a significant milestone in the journey toward mineral self-sufficiency. It is a testament to India’s commitment to domestic resource exploration and responsible management.