New Royalty Rates for Three Critical Minerals

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Context (PIB | IE): Cabinet has amended the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act 1957) to specify royalty in rates of three c ritical minerals, namely, Lithium, Niobium, and Rare Earth Elements (REEs).
Recently through another amendment of MMDR Act 1957, GOI has removed six critical minerals, including lithium and niobium, from the country’s atomic minerals lists to allow private players to mine them.

Six critical minerals removed from India’s atomic minerals lists are lithium, titanium, beryllium, zirconium, niobium, and tantalum.

These changes to the rules build on an earlier move to ease the issuing of mining leases and composite licences for 24 critical minerals.

Critical Minerals

Critical minerals are essential for economic development and national security.
The lack of availability of these minerals or the concentration of extraction or processing in a few geographical locations can lead to “supply chain vulnerabilities and even disruption of supplies”.
A mineral is critical when the risk of supply shortage and associated economic impact is (relatively) higher than other raw materials.

The lower royalty rates will attract private players in mining critical metals. They will bring more capital and new technologies; as a result, domestic production of critical minerals will increase.
India is currently heavily dependent on imports of these minerals. So, the need to increase their production is a high priority.
Critical minerals are in highly important for India to move towards green transition and e-mobility.

India’s Net Import Dependency of Critical Mineral
Critical Mineral	Percentage Dependency	Major Import Sources (2020)
Lithium	100%	Chile, Russia, China, Ireland, Belgium
Cobalt	100%	China, Belgium, Netherlands, US, Japan
Nickel	100%	Sweden, China, Indonesia, Japan, Philippines
Vanadium	100%	Kuwait, Germany, South Africa, Brazil, Thailand
Niobium	100%	Brazil, Australia, Canada, South Africa, Indonesia
Germanium	100%	China, South Africa, Australia, France, US
Rhenium	100%	Russia, UK, Netherlands, South Africa, China
Beryllium	100%	Russia, UK, Netherlands, South Africa, China
Tantalum	100%	Australia, Indonesia, South Africa, Malaysia, US
Strontium	100%	China, the US, Russia, Estonia, Slovenia
Zirconium(zircon)	80%	Australia, Indonesia, South Africa, Malaysia, US
Graphite(natural)	60%	China, Madagascar, Mozambique, Vietnam, Tanzania
Manganese	50%	South Africa, Gabon, Australia, Brazil, China
Chromium	2.5%	South Africa, Mozambique, Oman, Switzerland, Turkey
Silicon	<1%	China, Malaysia, Norway, Bhutan, Netherlands

Lithium is a non-ferrous, soft, silvery-white alkali metal.
It is also called ‘white gold’ due to its high demand for rechargeable batteries.

Under standard conditions, it is the least dense metal and the least dense solid element.
Like all alkali metals, it is highly reactive and flammable, so it must be stored in vacuum, inert atmosphere, or inert liquid (such as purified kerosene or mineral oil).
It exhibits a metallic lustre. But it corrodes quickly in the air to a dull silvery grey, then black tarnish.

It never occurs freely in nature but occurs mainly as pegmatitic minerals.
Due to its solubility as an ion, it is present in ocean water and commonly obtained from brines (high-concentration salt solution in water).
Lithium metal is isolated electrolytically from a mixture of lithium chloride and potassium chloride.

Pegmatite is a coarse-textured igneous rock that forms during the final stage of magma’s crystallisation. It contains large crystals and minerals rarely found in other types of rocks.

Top Producers: 1^st Australia > 2^nd Chile > 3^rd China > 4^th Aregentina > 5^th Zimbabwe

Lithium-ion batteries are used in laptops, mobiles, electric vehicles, wind turbines, solar panels, etc.
It is used to make alloys with aluminium and magnesium, which are stronger but lighter.
It is used in nuclear reactions, the ceramics and glass industry, and lubricating greases.
It is also used for carbon dioxide removal and air purification (esp. in confined areas, such as spacecraft and submarines).

Niobium is a grey metal that looks like steel or, when polished, like platinum.
Properties: It is soft, ductile, corrosion-resistant, and superconductive (at low temperatures).
Occurrence: It is primarily obtained from the minerals columbite-tantalite (coltan) and pyrochlore.
Top Producers of Niobium: 1^st Brazil > 2^nd Canada > 3^rd Rwanda > 4^th Nigeria > 5^th Mozambique.
Uses: Nuclear applications, alloys, electronic components, orthopaedic and dental implants, etc.

REEs are a group of 17 chemical elements that have similar properties.
They involve 15 Lanthanides group elements, along with Yttrium and Scandium, that show similar physical and chemical properties to the lanthanides.
REEs are divided into two forms: Heavy (HREEs) and Light (LREEs).
LREEs are abundant while HREEs are more critical due to their high demand and less availability.
Among LREEs, Neodymium is the most critical as it is extensively used in all mobile phones, medical equipment and electric vehicles.
HREEs (like, dysprosium, yttrium and cerium) are critical for clean energy technologies, however, due to their limited supply, they have a small market.