The ministry of mines is not looking to revise rates of royalty for minerals until the auctioned mines come into production stage, the Minister Coal, Mines and Parliamentary Affairs Pralhad Joshi said. “As most of the auctioned mines are yet to come into production stage, the impact of the present royalty rates on the downstream industry cannot be determined at this stage. Therefore, at present it is not feasible to revise the rates of royalty for minerals,” the minister said in a written reply to Rajya Sabha on Monday.
The government has auctioned 330 mineral blocks since the introduction of the auction regime back in 2015 of which most of the mines are yet to be operationalized.
“The royalty accrual to the state governments has more than tripled during the last four years,” the government said. “Hence, the revenue from the mineral sector will continue to show an upward trend in all mineral rich states with the operationalization of auctioned mines.”
A royalty is a fee imposed by the state or the central government on either the amount of minerals produced at a mine or the revenue or profit generated by the minerals sold from a mine.
The Union Cabinet had last month approved a royalty rate at 3% for lithium and niobium, and 1% for Rare Earth Elements (REEs). The 3% royalty for lithium is based on prices at the London Metal Exchange whereas for niobium, the royalty has been calculated from the average selling price.