Cabinet Approves Royalty Rates for Critical & Strategic Minerals Under MMDR Act

Context:

• The Centre has 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.

MMDR Act, 2023

• The MMDR Act (Amendment), 2023, delisted six minerals, including lithium and niobium, from the list of atomic minerals, thereby granting concessions for these minerals to the private sector through auction.
• The MMDR Act (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, Nnobium and REEs (not containing uranium and thorium), shall be auctioned by the central government.
• Earlier, The Second Schedule of the MMDR Act mandated a royalty rate of 12% of ASP for all minerals not specifically provided a royalty rate, making them non-competitive and not on par with global standards.
• The 3% royalty for Lithium is based on prices at the London Metal Exchange Price. For Niobium, the royalty has been calculated from the ASP, considering both primary and secondary sources, and REEs’ royalty is based on the ASP of Rare Earth Oxide.
• Critical minerals have become essential for economic development and national security. Lithium and REEs have gained significance given India’s commitment to energy transition and achieving the net-zero emissions target by 2070. 
• In February 2023, ‘inferred’ lithium resources of 5.9 million tonnes were established in Jammu & Kashmir, India’s largest Lithium deposit.

Lithium: White gold

• A soft, silvery metal. It has the lowest density 0.534  (g cm−3) of all metals. 
• It has a High Melting point of 180.50°C and a Boiling point of 1342°C. It reacts vigorously with water.
• The most important use of lithium is in rechargeable batteries for mobile phones, laptops, digital cameras and electric vehicles. Lithium is also used in some non-rechargeable batteries for 

Niobium

• Niobium is a silvery metal with a layer of oxide on its surface, which makes it resistant to corrosion. It is used in stainless steel alloys to improve their strength, particularly at low temperatures.
• Alloys containing niobium are used in jet engines, beams and girders for buildings, and oil and gas pipelines. 
• Given its superconducting properties, it is also used in magnets for particle accelerators and MRI scanners.

What are Rare Earth Elements or REE in MMDR Act?

• The REE are a set of seventeen metallic elements under MMDR Act, These include the fifteen lanthanides on the periodic table plus scandium and yttrium.
• REEs are used as components in high technology devices, including smart phones, digital cameras, computer hard disks, fluorescent and light-emitting-diode (LED) lights, flat screen televisions, computer monitors, and electronic displays. 
• Large quantities of some REEs are used in clean energy and defense technologies.

Source: livemint

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