Updated February 29th, 2024 at 18:22 IST

Amendments in MMDR Act on royalty rate for 12 strategic minerals get Cabinet nod

Approval for specifying the royalty rate will facilitate the auctioning of blocks for these 12 minerals for the first time in the country.

Reported by: Business Desk
Representative | Image:Unsplash
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Critical and strategic minerals: The Union Cabinet, chaired by Prime Minister Narendra Modi, has given the nod to an amendment to the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) to specify the royalty rate for 12 critical and strategic minerals, according to the official statement released on Thursday by the Ministry of Mines.

Beryllium, cadmium, cobalt, gallium, indium, rhenium, selenium, tantalum, tellurium, titanium, tungsten, and vanadium are among the 12 critical and strategic minerals as notified by the government. The amendment concludes the effort to streamline royalty rates for all 24 critical and strategic minerals.

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Previously, the government had notified the royalty rates for four critical minerals (glauconite, potash, molybdenum, and platinum group of minerals) on March 15, 2022, and for three critical minerals (lithium, niobium, and rare earth elements) on October 12, 2023.

The Mines and Minerals (Development and Regulation) Amendment Act, 2023, which came into force on August 17, 2023, listed 24 critical and strategic minerals in Part D of the First Schedule of the MMDR Act. The amendment mandated that mining leases and composite licences for these 24 minerals must be auctioned by the central government.

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Approval for specifying the royalty rate will facilitate the auctioning of blocks for these 12 minerals for the first time in the country. The royalty rate on minerals is a crucial financial consideration for bidders participating in block auctions.

Apart from that, the Ministry of Mines has prepared a method for calculating the Average Sale Price (ASP) of the mentioned minerals, which will enable the determination of bid parameters.

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The Second Schedule of the MMDR Act offers royalty rates for different minerals. Item No. 55 of the Second Schedule specifies that the royalty rate for minerals not specifically provided therein shall be 12 per cent of the Average Sale Price (ASP). 

The Ministry underlined that a default royalty rate of 12 per cent of ASP is significantly high compared to other critical and strategic minerals and is not comparable to rates in other mineral-producing countries.

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(With PTI inputs)

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Published February 29th, 2024 at 18:22 IST