India’s Cabinet on Wednesday set the royalty rates for mining three critical minerals, including lithium, niobium and rare earth elements (REE). The three are key minerals that will be used in various applications that will propel India’s switch to clean energy and its net zero emission target.

The royalty rates for lithium extraction by mining companies will be fixed at 3 per cent of the prices prevailing on the London Metal Exchange (LME).

Royalty rates for niobium mining were approved at 3 per cent of the average sale price; and for REE at 1 per cent of the average sale price of rare earth oxide, as per a statement by the Centre.

Lithium, an alkali metal, is one of the key components in rechargeable batteries that find usage in mobiles, laptops, electric vehicles, and medical devices like pacemakers. It is also used in energy storage solutions.

Conversely, Niobium is used in jet engines and rockets, beams and girders for buildings, and oil rigs, and oil and gas pipelines. This element also has superconducting properties and is used in superconducting magnets for particle accelerators, MRI scanners and Nuclear Magnetic Resonance equipment (spectroscopy).

Rare earth elements, meanwhile, refer to a group of 17-odd minerals that cover ones like scandium, yttrium, and cerium, among others. Most of these are used as catalysts and magnets, with the most common usage being in alloys, glass, electronics, petroleum extraction, electric motors of hybrid and EVS and wind turbines, among others.

“Critical minerals such as lithium and REEs have gained significance in view of India’s commitment towards energy transition and achieving net-zero emission by 2070. Lithium, Niobium and REEs have also emerged as strategic elements due their usages and geo-political scenario,” the Centre said in a statement, adding that encouraging indigenous mining would lead to reduced imports and setting up related industries and infrastructure projects. It is also expected to increase employment in the mining sector.

Incidentally, India has been exploring ways to secure lithium supplies, the critical raw material used to make electric vehicle batteries, and found its first deposits in Jammu & Kashmir. It is also in talks for securing supplies from overseas, like Argentina and Australia.

So far, India imports all major components into lithium-ion cell manufacturing. The country’s lithium-ion import bill for FY23 was Rs 23,171 crore. It covered electric accumulators, including separators. In FY22, imports for lithium-ion were Rs 13,673.15 crore.

According to Mines Ministry officials, the Geological Survey of India (GSI) has recently handed over the exploration report of REE apart from lithium blocks. Other exploration agencies are conducting exploration for critical and strategic minerals.

“The Centre 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, shortly,” said an official.

India reportedly has the fifth largest resource of REEs among global majors.

Mera Yuva Bharat

The Union Cabinet also approved the establishment of an autonomous body, Mera Yuva Bharat (MY Bharat), which will look towards youth development. Expected to benefit those in the 15-29 years age group, it will work towards improving leadership skills through experiential learning, pushing the youth to be social innovators, and better alignment between youth aspirations and community needs, apart from acting as a one-stop shop for young people and Ministries. It will create a centralized youth database, provide improved two-way communication to connect youth government initiatives and ensure accessibility, creating a physical ecosystem.