New Delhi: In what could give a fillip to India’s critical minerals sector, Union Finance Minister Nirmala Sitharaman Tuesday announced a slew of measures including exempting 25 such minerals including lithium and rare earth elements (REE) from customs duty and launching auction of the first tranche of offshore blocks for mining.
From mobile phones to electric vehicles, solar panels, semiconductors and wind turbines, all modern technologies are dependent on critical minerals such as lithium, graphite, cobalt, thallium and rare earth elements.
Currently, the customs duty for these 25 minerals varies between 5 and 7.5 percent. Cutting it to zero will reduce input costs and help the domestic industry. India is dependent on China and other countries to meet its requirement of critical minerals including lithium, cobalt and REE.
“Indigenising and overseas acquisition of mining and building domestic capabilities to process and recycle will secure the supply chain for the domestic manufacturing ecosystem, especially for clean energy sectors such as solar, wind, EV and batteries,” said Rishabh Jain, senior programme lead at the Council on Energy, Environment and Water, a policy research institution working in the critical minerals sector.
Jain said that as many countries globally look to diversify their imports, India is emerging as an attractive destination. “Reduction in customs duty for import will also play a pivotal role in supporting existing government initiatives such as the Production-Linked Incentive Schemes which are critical for India’s climate targets.”
Presenting the first budget of the NDA government’s third term, Sitharaman also announced the setting up of a ‘Critical Mineral Mission’ for domestic production, recycling, and overseas acquisition of such mineral assets.
“Its mandate will include technology development, skilled workforce, extended producer responsibility framework, and a suitable financing mechanism,” Sitharaman said during her budget address.
Also Read: India inks pact to boost critical minerals processing, clean energy transition
Auction of offshore mining of minerals
Sitharaman also announced that the government will launch the auction of the first tranche of offshore blocks for mining, building on the exploration already carried out.
The Centre had last year cleared amendments to the Offshore Areas Mineral (Development and Regulation) Act, 2002, allowing commercial mining of mineral resources in offshore areas.
So far, the private sector was not allowed to mine mineral resources in offshore areas, which include territorial waters, continental shelves, exclusive economic zones, and other maritime zones of India under the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act.
Last year, amendments to the Mines and Minerals (Development and Regulation) Act, 1957, also paved the way for commercial mining of six critical minerals — lithium, beryllium, niobium, tantalum, titanium and zirconium — and deep-seated minerals like gold, silver and copper.
Until then, commercial mining of these critical minerals by private companies was prohibited. Only government agencies were allowed in exploration and mining operations.
India launched the first-ever auction of 20 blocks of critical minerals, including lithium, molybdenum, and rare earth elements last year.
(Edited by Gitanjali Das)
Also Read: Kolkata firm wins bid for lithium block in Chhattisgarh’s Katghora, 1st in India to be auctioned