India sets lithium mining royalty at 3% of LME prices (updated)

LX International

11/10/2023 11:17

(Adds details on auction in paragraphs 5-7, background in 9-12)
       NEW DELHI, Oct 11 (Reuters) - India set royalty rates on
Wednesday for the mining of three critical minerals, including
lithium, that are key to its clean energy ambitions.
    The royalty rates for lithium extraction by mining companies
will be fixed at 3% of prices prevailing on the London Metal
Exchange (LME), the government said in a statement. 
    India has been exploring ways to secure supplies of lithium,
a critical raw material used to make electric vehicle batteries,
and found its first lithium deposits in February in the
federally controlled region of Jammu & Kashmir. 
    The government also set the royalty for niobium mining at 3%
of the average sale price, and for rare earth elements (REEs) at
1% of the average sale price of rare earth oxide. Niobium is
also used in making electric vehicle battery cells. 
    The approval will pave the way for the auction of mining
blocks for the three minerals for the first time in the country.
        "Critical minerals have become essential for economic
development and national security in the country," the
government said. 
  
        "Critical minerals such as Lithium and REEs have gained
significance in view of India's commitment towards energy
transition and achieving net-zero emission by 2070." 
  
    In June, Reuters reported that India planned to fix the
royalty rate for lithium extraction at 3%.
    India is expected to auction the newly found lithium blocks,
with estimated reserves of 5.9 million tonnes, later this year. 
        Government sources previously told Reuters that 
    at least a dozen
     Indian and foreign companies such as Adani Enterprises
 ADEL.NS , Vedanta Ltd  VDAN.NS , Reliance Industries  RELI.NS ,
Jindal Steel and Power Ltd  JNSP.NS , Himadri Chemicals and
Korea's LX International  001120.KS  are likely to take part in
the auction. 
  
        Plans to auction India's lithium reserve comes amid a
push by major economies to secure lithium supplies. 
  
        The United States, Canada and other countries have
established 
    a new partnership
     aimed at securing the supply of critical minerals,
including lithium.
  

 (Reporting by Shivam Patel and Blassy Boben; Editing by Louise
Heavens, Clarence Fernandez and Sharon Singleton)
 ((Shivam.Patel@thomsonreuters.com;))