India Cuts Royalty Rates for Key Minerals to Boost Domestic Production
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In a move aimed at increasing domestic production and reducing reliance on imports, the Indian government has approved new royalty rates for four critical minerals - graphite, zirconium, rubidium, and caesium. The Cabinet, chaired by Prime Minister Narendra Modi, made the decision on Wednesday, citing the need to attract fresh investment in the mining sector. The new royalty structure, which will be effective for upcoming auctions, includes a more favorable rate for graphite, which will be charged as a percentage of the sale price rather than a fixed amount per tonne. Graphite with 80% or more fixed carbon will attract a 2% royalty, while lower-grade graphite will pay 4%. Zirconium will be taxed at 1%, and rubidium and caesium at 2% each. The changes, which were approved through amendments to the Mines and Minerals (Development and Regulation) Act, 1957, are expected to boost participation in upcoming auctions and give companies greater clarity on the rates they will pay. The government is already auctioning several mineral blocks, including five graphite blocks, two rubidium blocks, and one each for caesium and zirconium. India currently imports around 60% of its graphite requirements, with nine working mines and 27 auctioned blocks in operation. The government believes the new royalty rates will help cut import dependence and boost domestic production of critical minerals, which are essential for industries like electric vehicles and electronics manufacturing.
