Union Cabinet Rationalizes Royalty Rates for Key Green Energy Minerals
The Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved the rationalization of royalty rates for four critical minerals—Graphite, Caesium, Rubidium, and Zirconium. The decision aims to encourage the auction and production of these minerals essential for high-technology applications and India’s green energy transition.
| Mineral | Royalty Rate |
|---|---|
| Caesium | 2% of Average Sale Price (ASP) of Caesium metal chargeable on the Caesium metal contained in the ore produced |
| Graphite (with 80% or more fixed carbon) | 2% of ASP on ad valorem basis |
| Graphite (with less than 80% fixed carbon) | 4% of ASP on ad valorem basis |
| Rubidium | 2% of ASP of Rubidium metal chargeable on the Rubidium metal contained in the ore produced |
| Zirconium | 1% of ASP of Zirconium metal chargeable on the Zirconium metal contained in the ore produced |
The revised royalty structure will promote auction of mineral blocks containing Caesium, Rubidium, and Zirconium, unlocking associated critical minerals like Lithium, Tungsten, Rare Earth Elements (REEs), and Niobium. The decision is expected to boost indigenous production, reduce import dependency, and generate new employment opportunities.
Graphite and Zirconium are listed among the 24 critical and strategic minerals under the Mines and Minerals (Development and Regulation) Act, 1957. Graphite serves as a key component in electric vehicle (EV) batteries, particularly as the anode material that enables high conductivity and charge capacity. Currently, India imports about 60% of its Graphite requirement. Nine Graphite mines are operational, 27 blocks have been auctioned, 20 blocks have been handed over by GSI and MECL for future auction, and 26 blocks remain under exploration.
Zirconium is vital for industries including nuclear energy, aerospace, healthcare, and manufacturing due to its corrosion resistance and high-temperature stability. Caesium is used in atomic clocks, GPS systems, precision and medical instruments including cancer therapy, while Rubidium finds applications in specialty glass for fibre optics, telecommunications, and night vision technologies.
The Central Government issued a Notice Inviting Tender (NIT) on 16 September 2025 for the Sixth Tranche of critical mineral block auctions, including 5 Graphite blocks, 2 Rubidium blocks, and 1 each of Caesium and Zirconium. The newly approved royalty rates will facilitate rational and transparent bidding processes.
Earlier, the royalty rate for Graphite had been fixed on a per tonne basis since 1 September 2014. Considering the variations in market prices, the royalty is now charged on an ad valorem basis, aligning returns with mineral grade and price changes. The updated structure aligns with the general 2–4% royalty range applied to most critical minerals in recent years.
Cabinet Approves Credit Guarantee Scheme for Exporters (CGSE)
The Union Cabinet has also approved the introduction of the Credit Guarantee Scheme for Exporters (CGSE), which aims to extend up to Rs. 20,000 crore in collateral-free credit