Cabinet gives nod for rationalisation of royalty rates of graphite, caesium, rubidium, zirconium

Graphite is the only mineral in the list of critical and strategic minerals whose royalty rate was specified on per tonne basis.
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The Hindu

In order to boost production of critical minerals, the Union Cabinet on Wednesday approved rationalisation of royalty rates of graphite, caesium, rubidium, and zirconium

For the graphite, there will be two categories. For graphite with 80 per cent or more fixed carbon, the rate will be 2 per cent of ASP (average sale price) on ad valorem basis. For graphite with less than 80 per cent fixed carbon, royalty rate will be 4 per cent. In case of caesium, the rate would be 2 per cent of ASP, calculated on the amount of caesium metal contained in the ore produced. The same rate will be applicable for rubidium, while it will be 1 per cent for zirconium, a government statement said.

“This decision will promote auction of mineral blocks containing caesium, rubidium and zirconium thereby not only unlocking these minerals but also associated critical minerals found with them, such as lithium, tungsten, REES, niobium etc,” the statement said. Fixing of royalty rates of graphite on ad valorem basis will proportionately reflect the change in prices of the mineral across grades. “Increase in indigenous production of these minerals would lead to reduction in imports and supply chain vulnerabilities and generate employment opportunities in the country,” the statement added.

Significance

Graphite, caesium, rubidium and zirconium are important minerals for high-tech applications and energy transition. Graphite and zirconium are also among the 24 critical and strategic minerals listed in the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act).

Graphite is a crucial component in electric vehicle (EV) batteries, primarily serving as the anode material, which enables high conductivity and charge capacity. However, India imports 60 per cent of its requirement of graphite. At present, 9 graphite mines are functional in the country, and 27 blocks have been successfully auctioned. Further, GSI and MECL have handed over 20 graphite blocks which will be auctioned and around 26 blocks are under exploration.

Zirconium is a versatile metal used in various industries, including nuclear energy, aerospace, healthcare and manufacturing, due to exceptional corrosion resistance and high temperature stability. Caesium is mainly used in high-tech electronic sector, particularly in atomic clocks, GPS systems, other high-precision instruments, medical instruments, including in cancer therapy, etc. Rubidium is used in making specialty glasses used in fibre optics, telecommunication systems, night vision devices etc.

Recently, the Central government issued NIT on September 16, 2025, for the sixth tranche of auction for critical mineral blocks. This also contains five blocks of graphite, two blocks of rubidium, and one block each of caesium and zirconium (details enclosed). Today’s approval of the Cabinet on rate of royalty will help the bidders to rationally submit their financial bids in auction.

Royalty rate of graphite has been specified on rupees per tonne basis since September 1, 2014. It is the only mineral in the list of critical and strategic minerals whose royalty rate was specified on per tonne basis.

Published on November 12, 2025