The Cabinet on October 11 fixed royalty rates for the mining of three critical and strategic minerals: lithium, niobium, and rare earth elements (REEs).

The royalty rates fixed by the government are:

• Lithium: 3 percent of the London Metal Exchange price
• Niobium: 3 percent of the average sale price, both for primary and secondary minerals
• REEs: 1 percent of the average sale price of rare earth oxide

According to reports, the royalty rates for the minerals were set lower than the default rate of 12 percent to encourage their production.

The government allowed private miners to extract critical minerals last year, despite the fact that lithium mining falls under the jurisdiction of the Department of Atomic Energy, which forbids private players from mining or producing it since only foreign private companies have the expertise and resources to conduct lithium mining.

India, one of the world”s largest emitters of greenhouse gases, has been seeking international agreements to secure essential minerals from resource-rich countries such as Australia, Argentina, and Chile, to secure essential minerals.

India has set a target of achieving 500 gigawatts (GW) of installed renewable energy capacity by 2030. Lithium plays a significant role in this project as it is a key raw material used to make electric vehicle batteries.

“Lithium, Niobium, and REEs have also emerged as strategic elements due to their usages and geopolitical scenario. Encouraging indigenous mining would lead to reduction in imports and setting up of industries and infrastructure projects. The proposal is also expected to increase generation of employment in the mining sector,” according to the statement made by the government.