Context: The first round of auction for critical and strategic minerals, featuring 20 blocks, will be initiated by the government on November 29, 2023.

More about the news: 

• The sale of twenty blocks containing critical and strategic minerals is geographically dispersed throughout the country. Metal recycling: The ministry is formulating a plan for metal recycling to enhance recycling capabilities and streamline the recycling process.
  

• Policy for critical minerals: The mines ministry is preparing a policy for critical minerals, which will include a road map for strengthening the supply chain of these essential resources.
• Joint Collaboration: The government will collaborate with partner countries and will focus on co-developing mineral processing and raw material manufacturing capabilities.
• Building resilience: Apart from domestic mechanisms, government id focusing on active participation in new partnerships and alliances, such as the Minerals Security Partnership (MSP) and the Australia-India Economic Cooperation and Trade Agreement.
  • These initiatives aim to bolster a resilient critical minerals value chain through both multilateral and bilateral engagements.

Need for Auction: 

• Critical minerals are essential for our country’s economic development and national security. 
• The lack of availability of these minerals or concentration of their extraction or processing in a few countries (eg. China) may lead to supply chain vulnerabilities.
• Critical minerals cater to the needs of sectors like renewable energy, defence, agriculture, pharmaceutical, high-tech electronics, telecommunications, transport, creation of gigafactories etc.

Recent Initative: 

• Amendment in the MMDR Act: 24 minerals were notified as Critical and Strategic minerals. 
  • The amendment confers the power to grant mineral concession of these minerals to Central Government so that Central Government can prioritise auction of these minerals looking at the requirements of the country. 
  • The revenue generated from these auctions shall accrue to State Governments. 

Rationalization of Rroyalty rates of Critical Minerals:

• The Government had specified royalty rates for Platinum Group of Metals (PGM) at 4%, Molybdenum at 7.5%, Glauconite and Potash at 2.5% in March, 2022.  
• On 12th October, 2023 the Government has specified royalty rates for Lithium at 3%, Niobium at 3% and Rare Earth Elements at 1%.

Also read: Global Action on Critical Minerals Outreach Programme

Further Reading: Critical Mineral Supplies Vital To Clean Energy Shift, Amendments to the Mines and Minerals (Development And Regulation) Act

News Source: Business Standard