GUWAHATI: The Union Cabinet has approved the amendment of the Second Schedule to the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) to specify royalty rates for 12 critical and strategic minerals. This move completes the exercise of rationalizing royalty rates for all 24 critical and strategic minerals identified under the MMDR Act.
The amendment, which comes in the wake of the Mines and Minerals (Development and Regulation) Amendment Act, 2023, lists 24 critical and strategic minerals in Part D of the First Schedule of the MMDR Act. Under this amendment, mining lease and composite license of these 24 minerals are to be auctioned by the Central Government.
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Today's approval by the Union Cabinet enables the Central Government to auction blocks for these 12 minerals for the first time in the country. The specified royalty rates play a crucial role in the auction process, providing important financial considerations for bidders. Additionally, the Ministry of Mines has prepared the manner for calculating the average sale price (ASP) of these minerals, facilitating the determination of bid parameters.
The Second Schedule of the MMDR Act provides royalty rates for various minerals. However, the default royalty rate for minerals not specifically provided in the schedule is 12% of the ASP, which is considerably high compared to other critical and strategic minerals. Therefore, the Union Cabinet has decided to specify reasonable royalty rates as follows:
• Beryllium, Indium, Rhenium, Tellurium: 2% of the ASP of relevant metal chargeable on the relevant metal contained in the ore produced.
• Cadmium, Cobalt, Gallium, Selenium, Tantalum, Titanium (produced from ores other than occurring in Beach Sand Minerals): 4% of the ASP of relevant metal chargeable on the relevant metal contained in the ore produced.
• Tungsten: 3% of the ASP of Tungsten Trioxide (WO3) on contained WO3 per tonne of ore on a pro-rata basis.
• Vanadium: 4% of the ASP of Vanadium Pentoxide on contained V2O5 per tonne of ore on a pro-rata basis.
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Encouraging indigenous mining of these minerals is expected to reduce imports and promote the setting up of related industries and infrastructure projects, leading to increased employment generation in the mining sector. The Central Government has also initiated the auction of critical and strategic mineral blocks, with the first tranche launched in November 2023.
The auction has received positive responses from the industry, with a total of 20 mineral blocks being auctioned.
