Rationalisation of Royalty Rates and Auction of Critical Mineral Blocks: Key Initiatives in FY2024-25, Says Mines Ministry
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New Delhi, December 28, 2024: The Ministry of Mines has outlined several key initiatives aimed at driving economic growth in India, with a focus on rationalising royalty rates and successfully auctioning critical mineral blocks. In its year-end review for 2024, the Ministry highlighted the significant progress made in these areas during the financial year 2024-25.
The government has amended the Second Schedule to the Mines and Minerals (Development and Regulation) (MMDR) Act, 1957, to rationalise the royalty rates for 12 critical and strategic minerals. These include Beryllium, Cadmium, Cobalt, Gallium, Indium, Rhenium, Selenium, Tantalum, Tellurium, Titanium, Tungsten, and Vanadium. The amendments are part of broader efforts to promote mineral exploration and utilization, ensuring that the royalty structure is more aligned with the industry’s needs.
To further ease mineral exploration, the government has amended several regulations, including the Minerals (Other than Atomic and Hydrocarbons Energy Mineral) Concession Rules-2016, the Mineral Conservation and Development Rules 2017, and the Mineral (Auction) Rules 2015. Additionally, the Atomic Minerals Concession Rule 2016 has been revised to streamline the process. These changes are expected to encourage faster exploration and development of minerals across India.
Furthermore, the First Schedule of the Offshore Areas Mineral Development and Regulation (OAMDR) Act, 2002 has been amended, rationalising the royalty rates for offshore minerals like construction sand, dolomite, limestone, polymetallic nodules, and crusts, as well as overburden and waste. These moves aim to unlock the potential of offshore resources and enhance the overall mineral sector.
In terms of actual progress, the Ministry revealed that 88 mineral blocks have been successfully auctioned by December 10, 2024, marking a significant achievement in mineral block auctions. Alongside this, the National Mineral Exploration Trust (NMET) has approved 120 mineral exploration and procurement projects, with an approved cost of Rs 609.54 crore, as part of its ongoing commitment to boost mineral exploration efforts across the country.
For critical and strategic minerals, the Geological Survey of India (GSI) has undertaken 195 mineral exploration projects. In addition, the Ministry has been empowered to auction blocks for the grant of exploration licenses through a new order dated October 21, 2024, under section 20A of the MMDR Act, 1957.
The Ministry has also placed a strong emphasis on funding mining exploration projects through NMET, which has supported 40 critical mineral exploration initiatives in 2024-25. To further enhance exploration efforts, 28 private exploration agencies (NPEAs) have been notified to encourage private sector participation in the mineral exploration landscape.
On the regulatory front, the government has implemented measures to promote the mining industry by cutting basic customs duties (BCD) on two minerals and removing customs charges on 25 others. These steps are aimed at making the mining sector more competitive and facilitating growth.
In a major announcement, the Union Finance Minister, during the Union Budget for 2024-25, declared the establishment of a Critical Mineral Mission. This mission aims to enhance domestic production, promote recycling of critical minerals, and acquire critical mineral assets from overseas markets, further strengthening India’s position in the global mineral supply chain.
These actions taken by the Ministry of Mines are expected to pave the way for sustainable growth in the mining sector, ensuring that critical and strategic minerals play a pivotal role in India’s economic development in the years to come.
