The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved the rationalisation and specification of royalty rates for four critical minerals — Graphite, Caesium, Rubidium, and Zirconium — in a move aimed at promoting the exploration and production of minerals essential for India’s green energy transition.

Under the new structure, the royalty rates are as follows:

Caesium: 2% of the Average Sale Price (ASP) of caesium metal chargeable on the caesium metal contained in the ore produced.

Graphite: 2% of ASP (ad valorem) for grades with 80% or more fixed carbon, and 4% of ASP (ad valorem) for grades with 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.

The decision is expected to facilitate the auction of mineral blocks containing Caesium, Rubidium, and Zirconium, unlocking the potential of these and other associated critical minerals such as Lithium, Tungsten, Rare Earth Elements (REEs), and Niobium. The shift to ad valorem royalty for Graphite ensures that royalty accruals will better reflect price variations across grades.

According to the government, the move will encourage domestic exploration and production, reduce dependence on imports, enhance supply chain resilience, and generate employment opportunities.

Graphite and Zirconium are among the 24 critical and strategic minerals listed under the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act). Both play vital roles in high-tech and energy applications — Graphite being a key component in electric vehicle (EV) batteries, while Zirconium is extensively used in nuclear, aerospace, and manufacturing sectors. Caesium and Rubidium, on the other hand, are integral to electronics, GPS systems, fibre optics, and medical technologies.

India currently imports around 60% of its Graphite requirement. The country has nine operational Graphite mines, with 27 blocks already auctioned and 20 more ready for auction handed over by the Geological Survey of India (GSI) and MECL. Another 26 blocks are under exploration.

The Cabinet’s decision follows the government’s Sixth Tranche of critical mineral block auctions, announced on September 16, 2025, which includes five Graphite blocks, two Rubidium blocks, and one block each of Caesium and Zirconium. The new royalty structure will help bidders make more informed and competitive financial offers.

Previously, Graphite was the only critical mineral with a royalty specified on a per-tonne basis since 2014. The switch to an ad valorem model aligns it with other critical minerals, whose royalty rates typically range between 2% and 4%, ensuring a more rational and transparent revenue framework.