India's Game-Changer: Govt Clears Policy for Critical Minerals Boom, Challenging Global Monopoly!

Commodities

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Updated on 12 Nov 2025, 03:53 pm

India's Union Cabinet has given its approval to rationalize the royalty rates for critical minerals such as graphite, caesium, rubidium, and zirconium. This strategic move is designed to significantly boost the country's domestic production of these vital resources, which are essential for green energy initiatives and advanced technological applications. The policy aims to reduce India's dependency on imports, particularly in light of increasing export restrictions from China, which currently holds a near monopoly on many critical minerals.

Key changes include shifting the royalty calculation for graphite from a per-tonne basis to an ad valorem basis, meaning it will be a percentage of the Average Sale Price (ASP). For graphite with 80% or more carbon, the rate is set at 2% of ASP, and for other grades, it's 4% of ASP. Zirconium will have a royalty rate of 1% of ASP, while rubidium and caesium will be taxed at 2% of ASP. These adjustments are expected to make the auctioning of mineral blocks containing these minerals, as well as associated critical minerals like lithium and rare earth elements, more attractive to bidders.

Impact This news directly impacts India's strategic mineral security, industrial growth, and the companies involved in mining and processing these minerals. It aims to reduce reliance on imports, particularly from China, and foster domestic production. This could lead to new investment opportunities and growth in sectors like electric vehicles, advanced manufacturing, and technology. The Indian stock market, particularly companies in the mining and allied sectors, may see positive sentiment and potential stock price appreciation.

Impact Rating: 7/10

Difficult Terms: Critical Minerals: Minerals essential for modern technology, the economy, and national security, with supply chain risks. Royalty Rates: A payment made by a mining company to the government for the right to extract minerals. Ad Valorem Basis: Royalty calculated as a percentage of the mineral's sale price, reflecting its market value. Average Sale Price (ASP): The average price at which a commodity is sold over a specified period. REES (Rare Earth Elements): A group of 17 metallic elements with unique properties crucial for high-tech applications. GSI (Geological Survey of India): India's national agency for geological research and exploration. MECL (Mineral Exploration Corporation Limited): A government-owned company focused on mineral exploration. MMDR Act (Mines and Minerals (Development and Regulation) Act): The primary legislation in India governing mining operations.