The Indian government announced a refresh of the royalty rates applied to lithium, niobium and rare earth projects.

The Union Cabinet of the Indian government announced a refresh of the royalty rates paid on lithium, niobium and rare earth element operations within India. A royalty rate of 3% will now be enacted on lithium and niobium operations, with lithium prices being taken from the London Metals Exchange lithium contracts and niobium prices from the actual sale prices (ASP). For rare earth operations a royalty of 1% will be implemented based on the ASP of rare earth oxides contained. The royalty update replaces the historical 12% of ASP royalty paid on lithium, niobium and rare earths, which Indian government assigned to minerals/products without specifically targeted royalty rates. These high royalty rates have been seen historically as a barrier for the development of lithium, niobium and rare earth assets within India.      

The new royalty rates come after the Indian Government implemented the Mines and Minerals (Development and Regulation) Amendment Act, 2023, in August 2023, which removed six minerals/products, including lithium, titanium, tantalum, niobium and zirconium from the list of restricted atomic minerals. This allows the private sector to be granted concessions and develop operations targeting these products. The Indian government also classified 24 minerals as critical and strategic minerals including rare earth minerals (not containing uranium and thorium). Central Indian government in expected to auction mining leasing covering known occurrences of the 24 critical and strategic minerals listed in the August 2023 Amendment Act.