Context: The Union Cabinet chaired by the Prime Minister approved the amendment of the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957 (‘MMDR Act’) for specifying the rate of royalty in respect of 3 critical and strategic minerals, namely, Lithium, Niobium and Rare Earth Elements (REEs).

Key Highlights

• The Mines and Minerals (Development and Regulation) Amendment Act, 2023 was passed by the Parliament and came into force in August 2023. The Amendment, among other things, delisted six minerals, including Lithium and Niobium, from the list of atomic minerals, thereby allowing the grant of concessions for these minerals to the private sector through auction.
  • The amendment provided that the mining lease and composite license of 24 critical and strategic minerals (which are listed in Part D of the First Schedule of the Act), including Lithium, Niobium and REEs (not containing Uranium and Thorium), shall be auctioned by the Central Government.
• Recently, the Union Cabinet's specification of the rate of royalty will enable the Central Government to auction blocks for Lithium, Niobium and REEs for the first time in the country. The royalty rate on minerals is an important financial consideration for the bidders in auction of blocks. Further, a method for calculation of the Average Sale Price (ASP) of these minerals has also been prepared by the Ministry of Mines which will enable the determination of bid parameters.
• The Second Schedule of the MMDR Act provides royalty rates for various minerals.
• The Central Government is working to launch the first tranche of the auction of critical and strategic minerals such as Lithium, REE, Nickel, Platinum Group of Elements, Potash, Glauconite, Phosphorite, Graphite, Molybdenum, etc. shortly.

Must Read Articles:

Critical Minerals: https://www.iasgyan.in/daily-current-affairs/critical-minerals#:~:text=Critical%20minerals%20have%20been%20classified,heavy%20rare%20earth%20elements%20(HREEs)

Mines and Minerals (Development and Regulation) Act: https://www.iasgyan.in/daily-current-affairs/mines-and-minerals-development-and-regulation-act

INDIA’S MINING POLICY: https://www.iasgyan.in/daily-current-affairs/indias-mining-policy

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