Lok Sabha Question No. 777 (UNSTARRED), answered on 2024-02-07
Subject: Royalty rates of Strategically Important Minerals
Ministry: MINES
Asked by: (Dr.) Ram Shankar Katheria

## GOVERNMENT OF INDIA MINISTRY OF MINES

## LOK SABHA UNSTARRED QUESTION NO. † 777

ANSWERED ON 07.02.2024

## ROYALTY RATES OF STRATEGICALLY IMPORTANT MINERALS

## †777. DR. RAM SHANKAR KATHERIA:

Will the Minister of MINES be pleased to state:

- (a) whether the Government is contemplating taking decision to approve the royalty rates for mining the three strategically important minerals i.e. Lithium, Niobium and Rare Earth Elements;
- (b) if so, the extent to which this will boost economic development;
- (c) the likely reduction in the imports of the said minerals; and
- (d) the extent to which the smooth energy transformation will help in achieving the goal of net zero carbon emissions?

## ANSWER

## THE MINISTER OF MINES, COAL AND PARLIAMENTARY AFFAIRS (SHRI PRALHAD JOSHI)

(a) to (d): Central Government has amended the Mines and Minerals (Development and Regulation) Act, 1957 [MMDR Act, 1957] through the MMDR Amendment Act, 2023  with  effect  from  17.08.2023.  Through  the  said  amendment,  the  Central Government has been empowered to exclusively auction mining lease and composite licence for 24 critical minerals listed in the new Part-D of the First Schedule to the said Act  which  includes  the  Lithium  bearing  minerals,  Niobium  bearing  minerals  and minerals of the "rare earths" group not containing Uranium and Thorium.

In order to specify rate of royalty in respect of Lithium, Niobium and Rare Earth Elements (REEs), the Central Government has amended the Second Schedule of the MMDR Act, 1957 vide Notification No. G.S.R. 736(E) dated 13.10.2023. The rates of royalty in respect of these minerals are at Annexure I .

Specification of rate of royalty has enabled the Central Government to auction blocks for Lithium, Niobium and REEs for the first time in the country. Lithium, Niobium and REEs have emerged as strategic elements due their usages and geo-political scenario. Encouraging indigenous mining of these minerals would lead to reduction in imports and setting up of related industries and infrastructure projects.

The  auction  of  critical  and  strategic  minerals  brings  several  key  benefits, including  bolstering  domestic  production,  reducing  import  dependency,  promoting sustainable resource management, attracting investments in the mining sector and the development  of key industries crucial for India's industrial and  technological advancement. This is a step towards creating a reliable supply chain of these mineral and  making  an  'AtmaNirbhar  Bharat'  and  contribute  towards  increased  economic growth.  These  minerals  are  also  vital  to  power  the  transition  to  a  low-emission economy, and the renewable technologies that will be required to meet the 'Net Zero' commitment of India by 2070.

The  Central  Government  has  launched  the  first  tranche  of  e-auction  of  20 mineral blocks of critical and strategic minerals on 29.11.2023 which aims to ensure steady supply of these minerals, thus reducing our reliance on imports and ensuring a more secure and resilient supply chain.

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## Annexure referred in reply to Lok Sabha Unstarred Question No. †777

| Mineral                                                                                                              | Rate of royalty                                                                                                                                                                                                                                                                 |
|----------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Lithium:                                                                                                             | Three per cent. of London Metal Exchange price chargeable on the Lithium metal in the ore produced.                                                                                                                                                                             |
| Niobium: (i) Primary (produced ores other Columbite- tantalite) (ii) By-product from ores other Columbite-tantalite) | from than (produced than Three per cent. of average sale price of Niobium metal chargeable on the Niobium metal contained in the ore produced. Three per cent. of average sale price of Niobium metal chargeable on the by-product Niobium metal contained in the ore produced. |
| Rare Earth Elements (produced from ores other than Monazite occurring in beach sand minerals):                       | One per cent. of average sale price of Rare Earth Oxide (REO) chargeable on the Rare Earth Oxide contained in the ore produced.                                                                                                                                                 |