- Move to enable auction of deposits containing these minerals
- Royalty on graphite to be on ad valorem basis henceforth
The Indian government has specified royalty rates for caesium, rubidium, and zirconium, allowing for the auction of deposits containing these critical minerals. In a decision by the Cabinet, chaired by the Prime Minister on Wednesday, the royalty rate for graphite was also changed to an ad valorem basis to reflect the change in prices of the mineral across grades.
In recent years, royalty rates of most of the critical minerals have been specified at a range of 2-4%.
In September, the government announced the sixth tranche of auctions for critical mineral blocks. This list contains 5 blocks of graphite, 2 blocks of rubidium and 1 block each of caesium and zirconium.
Wednesday’s Cabinet decision will not only promote the auction of mineral blocks containing these specific minerals but also unlock associated critical minerals found with them, such as lithium, tungsten, REES, niobium, etc.
Graphite and zirconium figure in the list of 24 critical and strategic minerals listed in the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act).
Graphite is crucial to electric vehicle (EV) batteries, primarily serving as the anode material, enabling high conductivity and charge capacity. However, India imports 60% of its requirement of graphite, according to the government release. At present, 9 graphite mines are operational, and a further 27 blocks have been auctioned, with 20 explored areas in the pipeline.
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 the high-tech electronic sector, particularly in atomic clocks, GPS systems, other high-precision instruments, and medical instruments, including in cancer therapy. Rubidium is used in making speciality glasses used in fibre optics, telecommunication systems, night vision devices, etc.
As far as the change to the royalty rate for graphite is concerned, it was the only mineral in the list of critical and strategic minerals whose royalty rate was specified on per per-tonne basis (since 1 September 2014).
Considering the variations in prices across grades, it was decided to henceforth charge royalty on an ad valorem basis.
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