Why is it in the news?
- 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.
More about the news
- 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.
- 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 and Strategic Minerals
- 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.
- 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.
- 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.
|Critical Minerals||Strategic Minerals|
|Rare earths (heavy and light)||Borates|