The Centre on Wednesday said it has approved royalty rates of 3 per cent each for lithium and niobium and 1 per cent for rare earth elements (REEs).

The decision on the royalty rates for the three critical and strategic minerals was taken by the Union cabinet.

The approval by the cabinet will enable the Centre to auction lithium, niobium and REE blocks for the first time in the country, it said.

Further, the method for calculating the average sale price (ASP) of these minerals has also been prepared by the Centre which will allow determining of bid parameters.

“The Union Cabinet... approved amendment of Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) for specifying rate of royalty in respect of three critical and strategic minerals, namely, lithium, niobium and Rare Earth Elements,” the mines ministry said in a statement.

“The Second Schedule of the MMDR Act provides royalty rates for various minerals...if the royalty rate for lithium, niobium and REE is not specifically provided, then their default royalty rate would be 12 per cent of ASP, which is considerably high as compared to other critical and strategic minerals.

“Also, this royalty rate of 12 per cent is not comparable with other mineral producing countries. Thus, it is decided to specify a reasonable royalty rate of lithium, niobium and REE as...lithium 3 per cent of London Metal Exchange price, niobium 3 per cent of Average Sale Price (both for primary and secondary sources), REE 1 per cent of Average Sale Price of Rare Earth Oxide,” the ministry said.

The Centre is working to launch the first round of the auction of critical and strategic minerals such as lithium, REE, nickel, platinum group of elements, potash, glauconite, phosphorite, graphite and molybdenum shortly.