Critical and Strategic Minerals

Recently, the Indian government has approved an amendment to specify competitive royalty rates for mining three strategically significant minerals: lithium, niobium, and rare earth elements (REEs). Earlier, these minerals were removed from the list of ‘specified’ atomic minerals, allowing private sector participation through auctioning concessions for these minerals.
These changes are part of an effort to streamline mining leases and licenses for 24 critical and strategic minerals used in electric vehicle batteries, energy storage devices, and high-end motors.

Amendments

The amendment aligns India’s royalty rates with global benchmarks, making future auctions more attractive to bidders.
New royalty rates include a 3% royalty for lithium mining based on the London Metal Exchange price, a 3% royalty for niobium, and a 1% royalty for REEs based on the Average Sale Price (ASP) of Rare Earth Oxide.

Reducing imports

India aims to reduce imports and develop end-use industries like electric vehicles and energy storage solutions while contributing to its commitment to energy transition and net-zero emissions by 2070.
India currently imports all its lithium, and this push for domestic exploration aims to reduce reliance on Chinese lithium-ion energy storage products.

About

Critical minerals are elements that are the building blocks of essential modern-day technologies and are at risk of supply chain disruptions. For example, Antimony, Beryllium, Bismuth, Cobalt, Copper etc.
These minerals are now used everywhere from making mobile phones, computers to batteries, electric vehicles and green technologies like solar panels and wind turbines.
Based on their individual needs and strategic considerations, different countries create their own lists.
For India, major import sources of Cobalt are China, US, Japan; Lithium (Chile, Russia, China); Nickel (Sweden, China) etc.

Usage

Rare earth elements (REEs) are crucial for EV motors, and much of global production is linked to China, which raises supply concerns.
Niobium is used in alloys to enhance strength and corrosion resistance in various applications, including jet engines, building materials, and medical devices.
Niobium is typically sourced from minerals like columbite, found in countries such as Canada, Brazil, Australia, and Nigeria.

KABIL

KhanijBidesh India Ltd. (KABIL) is a joint venture company set up with the participation of 3 Central Public Sector Enterprises namely, National Aluminium Company Ltd. (NALCO), Hindustan Copper Ltd. (HCL) and Mineral Exploration Company Ltd. (MECL).
KABIL is mandated to identify and acquire overseas mineral assets of critical and strategic nature such as lithium, cobalt, nickel, Copper, Neodymium, other rare earths etc.

AMIGOS IAS