Critical Mineral Mission to ramp up mining

Finance Minister Nirmala Sitharaman announced Critical Mineral Mission in the Union budget as the country faces shortage in critical minerals such as lithium, copper, cobalt and rare earth elements. It is essentially for supporting sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics. The mission is expected to open a new set of opportunities for mining giants in India, including Aditya Birla and Vedanta, besides the companies in steel sector with mining experience like Tata Steel and JSW.

"We will set up a critical mineral mission for domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets. Its mandate will include technology development, skilled workforce, extended producer responsibility framework, and a suitable financing mechanism," Sitharaman said in her budget speech.

The government will launch the auction of the first tranche of offshore blocks for mining. India is largely depending on China for critical minerals at present. Finance Minister announced to fully exempt 25 critical minerals from custom duties, and reduced basic custom duties (BCD) on two of them. “This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors,” Sitharaman said.

These critical minerals include antimony, beryllium, bismuth, cobalt, copper, gallium, germanium, lithium, niobium, nickel, potash, rare earth elements, tellurium, tin, tungsten, cadmium, and silicon (other than quartz and silicon dioxide). The custom duty on these minerals was in the range of 2.5%-10%. For silicon quartz and silicon dioxide, BCD has been reduced from 5-7.5% to 2.5%. BCD has been reduced from 5-7.5% range to 2.5% for graphite.

The PSU giants like Coal India, Indian Rare Earths Ltd, Bharat Coking Coal and Central Coalfields also will benefit from the mission as PSU majors have experience in critical mining.