Cabinet
approves Specification and Revision of Royalty Rates on Rare Earth Caesium,
Graphite, Rubidium, and Zirconium
·
The
Cabinet approved the specification and revision of royalty rates on Caesium,
Graphite, Rubidium, and Zirconium.
·
New
Royalty Rates:
o
Caesium: 2% of Average Sale Price (ASP) of caesium metal
(based on caesium metal contained in the ore produced)
o
Graphite:
§ 2% of ASP (ad valorem) for graphite with 80% or
more fixed carbon
§ 4% of ASP (ad valorem) for graphite with less than
80% fixed carbon
o
Rubidium: 2% of ASP of rubidium metal (based on rubidium
metal contained in the ore produced)
o
Zirconium: 1% of ASP of zirconium metal (based on zirconium
metal contained in the ore produced)
·
Purpose
and Impact:
o
Promotes
the auction of mineral blocks containing these minerals, as well as associated
critical minerals like Lithium, Tungsten, REEs (Rare Earth Elements), and
Niobium.
o
Fixing
graphite's royalty on an ad valorem basis ensures accruals reflect market price
variations across grades.
o
Increased
domestic production will reduce imports and supply chain risks, while
generating new jobs.
·
Strategic
Importance & Applications:
o
All four
minerals are crucial for high-tech applications and energy transition.
o
Graphite is essential for EV batteries (anode material);
India currently imports 60% of its needs. Currently, 9 graphite mines are
operational, 27 blocks have been auctioned, 20 more blocks ready for auction,
and 26 under exploration.
o
Zirconium is widely used in nuclear energy, aerospace,
healthcare, and manufacturing due to its durability and heat resistance.
o
Caesium is vital for atomic clocks, GPS, precision
instruments, and medical devices.
o
Rubidium is used in specialty glasses for fiber optics, telecom, and night vision devices.
·
Recent
Developments:
o
Sixth
Tranche of critical mineral block auction notifications issued in September
2025, including blocks for graphite, rubidium, caesium, and zirconium.
o
The
Cabinet’s royalty rate decision supports rational financial bids by auction
participants.
·
Graphite
Royalty Change:
Previously, graphite was the only critical mineral with royalty specified per
tonne. Now, ad valorem rates will better match market price changes across
grades.
·
Context: Most critical minerals’ royalty rates have shifted
to the 2–4% ASP range in recent years. This move is designed to unlock critical
minerals for green energy, industry, and technological growth in India.
The
Union Cabinet chaired by the Prime Minister, Narendra Modi has approved on 12
November, 2025 meeting to specify/revise the royalty rate of caesium, Graphite,
Rubidium and Zirconium as below:
|
Mineral |
Royalty Rate |
|
Caesium |
2% of Average Sale Price (ASP) of Caesium metal chargeable on the Caesium
metal contained in the ore produced |
|
Graphite (i)
With eighty per cent or more fixed carbon (ii)
With less than eighty per cent fixed carbon |
2% of ASP on ad valorem basis 4% of ASP on ad valorem basis |
|
Rubidium |
2% of ASP of Rubidium metal chargeable on the Rubidium metal contained
in the ore produced |
|
Zirconium |
1% of ASP of Zirconium metal chargeable on the Zirconium metal contained
in the ore produced |
The
above decision of the Union Cabinet will promote auction of mineral blocks containing
Caesium, Rubidium and Zirconium thereby not only unlocking these minerals but also
associated critical minerals found with them, such as Lithium, Tungsten, REES, Niobium
etc. Fixing of royalty rates of Graphite on ad valorem basis will proportionately
reflect the change in prices of the mineral across grades. Increase in indigenous
production of these minerals would lead to reduction in imports and supply chain
vulnerabilities and also generate employment opportunities in the country.
Graphite,
Caesium, Rubidium and Zirconium are important minerals for high-tech applications
and energy transition. Graphite and Zirconium are also among the 24 critical and
strategic minerals listed in the Mines and Minerals (Development and Regulation)
Act, 1957 (MMDR Act).
Graphite
is a crucial component in electric vehicle (EV) batteries, primarily serving as
the anode material, which enables high conductivity and charge capacity. However,
India imports 60% of its requirement of Graphite. At present, 9 Graphite mines are
working in the country and further 27 blocks have been successfully auctioned. Further,
GSI and MECL have handed over 20 Graphite blocks which will be auctioned and around
26 blocks are under exploration.
Zirconium
is a versatile metal used in various industries, including nuclear energy, aerospace,
healthcare and manufacturing, due to exceptional corrosion resistance and high temperature
stability. Caesium is mainly used in high-tech electronic sector, particularly in
atomic clocks, GPS systems, other high precision instruments, medical instruments
including in cancer therapy, etc. Rubidium is used in making specialty glasses used
in fibre optics, telecommunication systems, night vision devices etc.
Recently,
the Central Government has issued NIT on 16th September, 2025, for the Sixth Tranche
of auction for critical mineral blocks. This also contains 5 blocks of Graphite,
2 blocks of Rubidium and 1 block each of Caesium and Zirconium (details enclosed).
Today's approval of the Union Cabinet on rate of royalty will help the bidders to
rationally submit their financial bids in auction.
Royalty
rate of Graphite has been specified on rupees per tonne basis since 1st September,
2014. It is the only mineral in the list of critical and strategic minerals whose
royalty rate was specified on per tonne basis. Further, considering the variations
in the Graphite prices across grades, royalty of Graphite is now decided to be charged
on ad valorem basis, so that royalty accruals in different grades would proportionately
reflect the changes in the prices of the mineral. In recent years, royalty rates
of most of the critical minerals have been specified at the range of 2% to 4%.