Cabinet Decision: Cabinet approved the royalty rate of Lithium and two other strategic minerals required for EV batteries, auction will start soon.

Cabinet Decision: Cabinet approved the royalty rate of Lithium and two other strategic minerals required for EV batteries, auction will start soon.

Cabinet Meeting: For the first time in the country, the way has been cleared for auction of Lithium, Niobium and Rare Earth Elements (REE) blocks. Prime Minister In the cabinet meeting chaired by Narendra Modi, the royalty rate for these minerals, which are considered very important from strategic point of view, has been approved. 

The Cabinet has fixed the royalty rate of Lithium at 3 percent which will be charged on the prices of Lithium prevailing on the London Metal Exchange. There is a possibility of huge demand for lithium in India. Lithium is used to make batteries for electric vehicles. India has opened a large reserve of Lithium in Jammu and Kashmir in February 2023. 

It has been decided to fix the royalty rate of niobium at 3 percent of the average sales price and the royalty rate of rare earth elements at 1 percent. Actually, the central government is going to auction these minerals in a few weeks. Niobium is also used in making battery cells of electric vehicles. After getting the approval for the auction from the Cabinet, these minerals will be auctioned for the first time in the country. The government said that these minerals, which are considered very important from a strategic point of view, are very important for the economic development and national security of the country. The Ministry of Mining said in its statement, the Union Cabinet has approved three important and strategic minerals. Approval has been given to amend the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) to fix the rate of royalty in respect of minerals- Lithium, Niobium and REE. The importance of critical minerals like Lithium and REE has increased in view of India’s resolve to achieve energy transition and net-zero carbon emissions by 20270. 

The Cabinet decision is also expected to increase employment opportunities in the mining sector. Geological Survey of India (GSI) and other agencies are exploring important and strategic minerals in the country. The central government is soon going to start the first round of auction of important and strategic minerals like lithium, REE, nickel, platinum group elements, potash, glauconite, phosphorite, graphite and molybdenum.

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