The government has established the royalty rates for twelve crucial and strategic minerals, encompassing beryllium, cadmium, cobalt, gallium, indium, rhenium, selenium, tantalum, tellurium, titanium, tungsten, and vanadium. The rates vary between two and four percent based on the mineral and its associated by-products.
Previously, the government had announced royalty rates for seven critical minerals, including glauconite, potash, molybdenum, PGM (platinum group of minerals), lithium, niobium, and REE (rare earth elements).
In 2023, government had unveiled a list of 24 critical and strategic minerals, prompting necessary amendments to the MMDR Act. The amendment stipulated that mining leases and composite licenses for these 24 minerals would be auctioned by the Centre. The first tranche of critical mineral auctions occurred in November 2023, followed by the second tranche starting on February 29.
Royalty rates significantly influence financial considerations for bidders in block auctions. The ministry of mines has devised the method for calculating the average sale price (ASP) of these minerals to determine bid parameters.
The Second Schedule of the MMDR Act outlines royalty rates for various minerals. For minerals not specifically listed, the royalty rate defaults to twelve percent of the ASP, which is notably higher than rates for other critical and strategic minerals internationally.
According to the newly determined rates, beryllium, indium, rhenium, and tellurium will incur a royalty of two percent of the ASP of the relevant metal contained in the ore produced. Cadmium, cobalt, gallium, selenium, tantalum, and titanium will face a four percent royalty for the primary product/mineral and two percent for by-products. Vanadium royalties are split into two stages: four percent for the primary mineral and two percent for by-products. Tungsten will be subject to a three percent royalty on the ASP of tungsten trioxide (WO3).
As reported by Indian Defence News, the Geological Survey of India (GSI) and Mineral Exploration and Consultancy Ltd. (MECL) recently submitted exploration reports for thirteen blocks containing one or more critical minerals like cobalt, titanium, gallium, vanadium, and tungsten.
