India cuts royalties for mining 12 critical minerals, including Vanadium

India's Cabinet has approved new royalty rates for mining of 12 critical and strategic minerals -- Beryllium, Cadmium, Cobalt, Gallium, Indium, Rhenium, Selenium, Tantalum, Tellurium, Titanium, Tungsten, and Vanadium -- which will allow the government to auction mining blocks for these minerals in the country.

A meeting of the Union Cabinet, chaired by Prime Minister Shri Narendra Modi, approved amendments of the Second Schedule to the Mines and Minerals (Development and Regulation) Act, 1957 for specifying rate of royalty in respect of the 12 critical and strategic minerals, the Press Information Bureau said. The new rates are: 

The Geological Survey of India and Mineral Exploration & Consultancy Ltd, both Government of India authorities, are currently conducting explorations for these minerals.

In addition, the Ministry of Mines has formulated a methodology for calculating the average sale price (ASP) of these minerals. This clarity in methodology and rationalization of royalty rates will help both the government and the prospective bidders determine parameters of the bid. 

The Cabinet decision completes the government's exercise to rationalize royalty rates for all the scheduled 24 critical and strategic minerals. The Center had earlier notified royalty rates for four critical minerals, viz, Glauconite, Potash, Molybdenum and Platinum Group of Minerals, on March 15, 2022, and three critical minerals -- Lithium, Niobium and Rare Earth Elements -- on October 12 last year.

India's amended mining regulations, as laid out in the Mines and Minerals (Development and Regulation) Amendment Act, list 24 critical and strategic minerals for which the Center can issue mining lease and composite licences. The act also provides royalty rates for various minerals, including a default royalty rate of 12 percent of the Average Sale Price (ASP) for minerals whose royalty rate is not specifically provided therein.

Critical minerals -- such as Beryllium, Titanium, Tungsten, Tantalum and Vanadium -- cater to the requirements of sectors such as renewable energy, defence, agriculture, pharmaceutical, high-tech electronics, telecommunications, transport, creation of gigafactories etc. 

They play a pivotal role in development of electric vehicles and batteries, and will play an important role in helping India meet its commitment towards energy transition and achieving net-zero emission status by 2070.

The Center is looking to encourage indigenous mining of these minerals to reduce imports and set up related industries and infrastructure projects in a localized ecosystem.