Cabinet approves rationalisation of royalty rates for four critical minerals to boost domestic production

THEBUSINESSBYTES BUREAU

NEW DELHI, NOVEMBER 12, 2025

In a significant move aimed at strengthening India’s critical minerals ecosystem and promoting self-reliance in high-tech industries, the Union Cabinet chaired by Prime Minister Narendra Modi has approved the rationalisation of royalty rates for four critical minerals — graphite, caesium, rubidium, and zirconium.

As per the decision, caesium and rubidium will each attract a 2 per cent royalty based on the average sale price (ASP) of the respective metal contained in the ore produced. Zirconium will have a royalty rate of 1 per cent of ASP, while graphite will be charged 2 per cent of ASP on an ad valorem basis for ore with 80 per cent or more fixed carbon, and 4 per cent for ore with less than 80 per cent fixed carbon.

According to an official statement, the Cabinet’s decision will pave the way for auctioning mineral blocks containing caesium, rubidium, and zirconium, unlocking not only these elements but also their associated critical minerals such as lithium, tungsten, rare earth elements, and niobium. The move is expected to accelerate the exploration and production of these strategic resources in India, reduce import dependency, and create new employment opportunities across the mining and manufacturing value chain.

Graphite, caesium, rubidium, and zirconium play a crucial role in advanced technologies and energy transition. Graphite and zirconium are among the 24 minerals identified as critical and strategic under the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act). Graphite is particularly vital for electric vehicle (EV) batteries, serving as the anode material that provides high conductivity and charge capacity. Currently, India imports nearly 60 per cent of its graphite requirements, despite having nine operational graphite mines and 27 additional blocks successfully auctioned. Another 20 graphite blocks identified by the Geological Survey of India (GSI) and Mineral Exploration & Consultancy Limited (MECL) are ready for auction, while 26 more are under exploration.

Zirconium, known for its exceptional corrosion resistance and high-temperature stability, is extensively used in the nuclear, aerospace, and healthcare sectors. Caesium finds application in precision technologies such as atomic clocks, GPS systems, and medical devices, while rubidium is used in specialty glass manufacturing for fibre optics, telecommunications, and night vision equipment.

By aligning royalty rates with international standards and ensuring transparency through the ASP-based mechanism, the government aims to attract private sector participation and foster innovation in the critical minerals space, thereby enhancing India’s strategic resource security and global competitiveness in emerging technologies.