Cabinet approves new royalty rates for 4 key critical minerals
The Cabinet has approved amendments to the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957, to bring in these changes
The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved new royalty rates for four key critical minerals — graphite, zirconium, rubidium and caesium — in a bid to increase domestic production, reduce import dependence and attract fresh investment in the mining sector.
“There are some critical minerals available in the country whose royalty structure needs to be changed. A very high royalty was imposed on these materials, so that has been reduced to increase their production,” said Union minister of IT, railway and I&B Ashwini Vaishnaw at a press briefing after the cabinet meeting on Wednesday.
Under the revised structure, the royalty for graphite will now be calculated on an ad valorem basis instead of per tonne basis, meaning it will be charged as a percentage of the average sale price instead of a fixed amount per tonne. For graphite containing 80% or more fixed carbon, the royalty will be 2% of the average sale price, while lower-grade graphite will attract 4%. The royalty rate for zirconium has been fixed at 1%, and 2% for rubidium and caesium each.
The Cabinet has approved amendments to the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957, to bring in these changes.
“All of these elements are used a lot in the country, especially in the electric vehicle industry, electronics manufacturing industry, and strategic sectors. The new blocks of these four elements that will be auctioned soon will see enhanced participation,” Vaishnaw said, adding the new rates will also give greater clarity to companies planning to bid for critical mineral blocks in upcoming auctions.
India is already in the process of auctioning several of these mineral blocks. In September 2025, the government issued the sixth tranche of notices inviting tenders, which included five graphite blocks, two rubidium blocks, and one block each for caesium and zirconium, according to a government press release.
As per government estimates, India currently imports about 60% of its graphite requirements. According to the release, India currently has nine working graphite mines, 27 auctioned blocks, 20 more handed over by the Geological Survey of India and Mineral Exploration Corporation Limited for auction, and another 26 under exploration.
The government believes that the Cabinet’s decision will also boost domestic production and cut import dependence of those critical minerals associated with the four rationalised elements like lithium, tungsten, rare earth elements and niobium.