The Union Cabinet approved royalty rates for crucial minerals, as reported by a media house, citing insider sources. This decision follows Mines Secretary Vivek Bharadwaj's announcement in September about the imminent auction of critical mineral mines by the government.

In August, reports surfaced about India gearing up for the auction process of approximately 100 critical mineral blocks. Mines Secretary Bharadwaj disclosed that these blocks, slated for auction, encompass minerals like nickel, lithium, cobalt, platinum, and rare earths, as per a Bloomberg report. He emphasised that the legal framework had been established, and the blocks were ready for auction. The bidding tender is expected to be released by December, with auctions commencing three months later.

Mineral royalty signifies the economic rent payable to the government for the right to extract mineral resources. India's mineral royalty rates, among the world's highest according to a Centre for Social and Economic Progress (CSEP) report, have hampered the mining sector's competitiveness. Aligning these rates with global best practices, as advocated by CSEP, would attract investments and foster mining sector growth. Lower royalty rates would incentivise future mineral exploration and production within India.

India modified its mining regulations in July to promote exploration of critical minerals such as lithium, enabling private miners to search for these materials. These reforms are crucial for auctioning recently identified lithium blocks in Jammu and Kashmir and Karnataka. State-run entities and major energy corporations like Coal India Ltd. and NTPC Ltd. are actively exploring global opportunities for these essential minerals. Additionally, the establishment of Khanij Bidesh India Ltd., a joint venture involving three government-owned companies, underscores India's commitment to securing critical mineral assets globally, focusing on regions like Australia and South America.

In September, Reuters, citing sources, reported that the auction for Jammu and Kashmir's lithium reserves would take place in the coming weeks. India, aiming to secure a stable supply of lithium for electric vehicle batteries, discovered its first lithium deposits in Jammu and Kashmir in February, estimated at 5.9 million tonnes.

"The auction will commence shortly, and international miners have expressed interest," stated a government official, as reported by Reuters. However, the mines ministry refrained from official comments on this matter.

Source: Indiatimes