India’s Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved royalty rates ranging from 1% to 4% on four critical minerals—caesium, graphite, rubidium and zirconium—shifting graphite to an ad valorem basis for the first time since 2014 and clearing the path for the sixth tranche of block auctions launched last month.
The Cabinet fixed caesium royalty at 2 per cent of the average sale price (ASP) of caesium metal chargeable on the caesium metal contained in the ore produced. Rubidium will carry an identical 2 per cent of ASP of rubidium metal contained in the ore. Zirconium royalty was set at 1 percent of ASP of zirconium metal contained in the ore.
For graphite, the rate will be 2 per cent of ASP on an ad valorem basis for grades with eighty per cent or more fixed carbon, and 4 percent of ASP for grades with less than eighty per cent fixed carbon.
The government described the move as a “game-changer” for critical minerals exploration. “The above decision of the Union Cabinet will promote auction of mineral blocks containing caesium, rubidium and zirconium thereby not only unlocking these minerals but also associated critical minerals found with them, such as lithium, tungsten, REEs, niobium etc.,” the Mines Ministry said in a statement.
It added that fixing graphite royalties on an ad valorem basis “will proportionately reflect the change in prices of the mineral across grades.”
Until now, graphite was the only critical mineral with royalty fixed on a rupees-per-tonne basis since September 1, 2014.
In recent years, most critical minerals have been assigned rates between 2 per cent and 4 percent. The shift comes amid India’s push to reduce import dependence and secure supply chains for high-tech and green energy applications.
“Increase in indigenous production of these minerals would lead to reduction in imports and supply chain vulnerabilities and also generate employment opportunities in the country,” the government said.
Graphite, a cornerstone of electric vehicle (EV) batteries where it serves as the anode material for high conductivity and charge capacity, is currently imported to meet 60 percent of India’s demand. Only nine graphite mines are operational, though 27 blocks have been successfully auctioned. The Geological Survey of India (GSI) and Mineral Exploration Corporation Limited (MECL) have handed over 20 additional graphite blocks for auction, while 26 more remain under exploration.
Zirconium, prized for its exceptional corrosion resistance and high-temperature stability, is used in nuclear reactors, aerospace components, healthcare implants and advanced manufacturing.
Caesium powers the high-tech electronics sector, particularly in atomic clocks, GPS systems, precision instruments and medical devices including cancer therapy equipment. Rubidium is essential in specialty glasses for fibre optics, telecommunication systems and night-vision devices.
“Graphite, caesium, rubidium and zirconium are important minerals for high-tech applications and energy transition,” the statement read.
Notably, graphite and zirconium are among the 24 critical and strategic minerals listed under the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act).The timing is critical: the Central Government issued a Notice Inviting Tender (NIT) on September 16, 2025, for the sixth tranche of critical mineral block auctions. The tranche includes 5 graphite blocks, 2 rubidium blocks, and 1 block each of caesium and zirconium.
“Today’s approval of the Union Cabinet on rate of royalty will help the bidders to rationally submit their financial bids in auction,” officials said.
Industry sources welcomed the clarity. “Ad valorem rates remove pricing uncertainty and make high-grade graphite blocks more attractive,” said a senior executive at a Mumbai-based EV battery materials firm, speaking on condition of anonymity.
The Mines Ministry is expected to notify the revised royalty schedule in the Official Gazette shortly, enabling immediate application in ongoing and future auctions.
With global demand for critical minerals surging amid the energy transition, India’s reforms—part of broader amendments to the MMDR Act—are seen as a strategic step toward self-reliance in semiconductors, renewable energy storage and defence technologies.
