Cabinet approves amendment for specifying royalty in respect of certain minerals

New Delhi, March 10, 2022

The Union Cabinet on Wednesday approved a proposal of the Ministry of Mines for amendment of the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957 for specifying the rate of royalty in respect of Glauconite, Potash, Emerald, Platinum Group of Metals (PGM), Andalusite, Sillimanite and Molybdenum.

The approval would ensure the auction of blocks in respect of these minerals and thereby reducing the import of these minerals, an official press release said.

It would also generate empowerment opportunities in the mining sector as well as manufacturing sector which will help in ensuring inclusive growth of a large section of the society, the release said.

The rate of royalty for Andalusite, Sillimanite and Kyanite, which are mineral polymorphs, are kept at the same level.

"The approval will lead to import substitution in respect of many important minerals thereby saving valuable forex reserves. It will reduce the country’s foreign dependency through the local production of minerals. The approval would ensure the auction of mineral blocks in respect of Glauconite, Potash, Emerald, Platinum Group of metals, Andalusite and Molybdenum for the first time in the country," the release said.

The Act was amended in 2015 to usher in a new regime of granting mineral concessions through auction to ensure transparency and non-discrimination in the allocation of the mineral wealth of the country. The auction regime has matured since then. To give further impetus to the mineral sector, the Act has been further amended in 2021.

"The Government has given a major boost to the auction of mineral blocks, increasing production, improving ease of doing business and increasing contribution of mineral production to Gross Domestic Product (GDP)," the release said.

According to it, in the last 4-5 years, Central agencies like the Geological Survey of India and Mineral Exploration Corporation Ltd. have carried out exploration and handed over reports to the State Governments of several blocks of minerals that are hitherto not mined in the country.

"When it comes to minerals such as Glauconite/ Potash, Emerald, Platinum Group of Metals (PGM), Andalusite and Molybdenum, the country is dependent on the import of these minerals. As a major step towards mineral self-sufficiency, many State Governments have identified such mineral blocks for auction. However, the rate of royalty for these minerals was not separately provided and was not appropriate for giving impetus to the mining of these minerals.

"Accordingly, the Ministry had proposed reasonable rates of royalty to encourage better participation in the auction. These rates have been fixed after extensive consultations with the State Governments and various Ministries/Departments of the Central Government. The Ministry of Mines will also provide the methodology for calculation of the Average Sale Price (ASP) of these minerals required for enabling auction of these mineral blocks," the release said.

Minerals like Glauconite and Potash are used as fertilizer in agriculture. Platinum Group of Metals (PGM) are high-value metals used in various industries and new innovative applications. Minerals like Andalusite, molybdenum are vital minerals used in industrial applications.


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