In a major step toward boosting India’s self-reliance in critical minerals essential for the green energy transition, the Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the rationalization of royalty rates for four vital minerals — Graphite, Caesium, Rubidium, and Zirconium.
This decision represents a strategic policy reform under the vision of Azadi Ka Amrit Mahotsav, aimed at unlocking India’s mineral wealth, promoting sustainable mining, and strengthening the nation’s clean energy supply chains.
Revised Royalty Rates Announced
The Cabinet has approved the following royalty structure for these critical minerals:
| Mineral | Royalty Rate |
|---|---|
| Caesium | 2% of Average Sale Price (ASP) of Caesium metal, chargeable on the Caesium metal contained in the ore produced |
| Graphite | (i) 2% of ASP on ad valorem basis for 80% or more fixed carbon (ii) 4% of ASP on ad valorem basis for less than 80% fixed carbon |
| 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 |
Driving Critical Mineral Auctions and Indigenous Production
The Cabinet’s decision is expected to promote auction of mineral blocks containing Caesium, Rubidium, and Zirconium, thereby unlocking not only these resources but also associated critical minerals such as Lithium, Tungsten, Rare Earth Elements (REEs), and Niobium.
By rationalizing royalty rates, the Government aims to create a transparent, competitive, and investment-friendly framework for the exploration and mining of critical minerals. This will increase domestic production, reduce import dependency, minimize supply chain vulnerabilities, and generate new employment opportunities in the mining and processing sectors.
Importance of These Minerals for Green Energy and Technology
These four minerals are vital for high-tech manufacturing and clean energy technologies.
- Graphite plays a crucial role in electric vehicle (EV) batteries, serving as the anode material that provides high conductivity and charge capacity. Currently, India imports nearly 60% of its Graphite requirement. At present, 9 Graphite mines are operational, with 27 more blocks auctioned and 20 new blocks handed over by GSI and MECL for upcoming auctions.
- Zirconium is a strategic metal used in nuclear energy, aerospace, and healthcare due to its excellent corrosion resistance and heat stability.
- Caesium is essential in atomic clocks, GPS systems, medical instruments, and high-precision electronic devices.
- Rubidium finds applications in fiber optics, telecommunications, night-vision devices, and specialty glass manufacturing.
These minerals form the backbone of emerging green technologies and the energy transition economy, making this decision critical to India’s future competitiveness in the global supply chain.
Supporting Transparent Auctions and Fair Valuation
The royalty rates will also provide clarity to participants in the Sixth Tranche of critical mineral block auctions, announced on 16 September 2025, which includes 5 Graphite blocks, 2 Rubidium blocks, and 1 block each of Caesium and Zirconium. The revised rates will enable bidders to make rational, informed financial bids during the auction process.
Previously, Graphite’s royalty rate was fixed on a per tonne basis since 2014 — the only critical mineral with such a structure. By moving to an ad valorem system, the new regime ensures that royalty accruals reflect market prices and mineral grades, maintaining fairness and adaptability.
A Step Toward Mineral Self-Reliance and Green Growth
With royalty rates for most critical minerals now standardized between 2% and 4%, this Cabinet decision strengthens India’s policy framework for sustainable mineral resource management.
It marks another milestone in India’s pursuit of Atmanirbhar Bharat, supporting green energy industries, promoting domestic exploration, and ensuring long-term energy and resource security — a key pillar of India’s journey toward Viksit Bharat 2047.