‘Full duty exemption on waste and scrap of 12 critical minerals to secure availability for manufacturing of finished goods in India’
Full exemption of duty on waste and scrap of 12 critical minerals that include cobalt powder and waste, the scrap of lithium-ion battery, and so forth, proposed in the Budget, will help secure the availability of these minerals domestically, and ensure manufacturing of finished goods in India for clean energy, electronics, agriculture, defence and other important industries, G Kishan Reddy, Union Minister for Mines, said. In an interview to businessline, Reddy spoke about India’s mineral security programme and how the Budget proposals boost the same, the upcoming tailings policy and other mining reforms.
Budget 2025-26 speaks of the push for critical mineral security. Your comments.
Critical minerals are classified as those essential for economic development and national security. The lack of availability these minerals in the country and concentration of extraction or processing in a few geographical locations may lead to supply chain vulnerabilities and even disruptions. In all, 24 minerals have been listed as critical.
In the July 2024, that is Budget (2024-25), customs duty on 25 critical minerals that are not domestically available was exempted and Basic Customs Duties (BCD) was reduced for two minerals. The National Critical Mineral Mission announced last year got approved by the Cabinet with a proposed expenditure of ₹16,300 crore, till 2030-31.
In this year’s budget, following up on the approval of the Mission, the Government has fully-exempted duty on waste and scrap of 12 critical minerals, cobalt powder and waste, the scrap of lithium-ion battery. This will help secure the availability of these minerals domestically, push manufacturing of finished goods in India for clean energy, electronics, agriculture, defence and other important industries.
It also strengthens the circular economy and promotes the recycling industry and more jobs for our youth.
Any further push towards critical mineral security?
The National Critical Mineral Mission aims to secure a long-term sustainable supply of critical minerals and strengthen mineral value chains encompassing all stages from mineral exploration, mining to beneficiation, processing, and recovery from end-of-life products. Apart from the approved ₹16,300 crore expenditure, out of which ₹2,600 crore will be budgetary support; additional ₹18,000 crore investment is expected by PSUs, among others.
The Ministry of Mines is also actively participating in multilateral platforms such as the Minerals Security Partnership and the Indo-Pacific Economic Framework, to strengthen critical mineral supply chains.
Through Khanij Bidesh India Limited (KABIL), a JV, the Ministry is securing critical minerals from overseas sources, collaborating with resource-rich countries like Australia and Argentina.
The Mission will further drive these efforts by fostering bilateral and multilateral partnerships through strategic trade agreements and international collaboration.
In an endeavour to achieve the objectives of NCMM fully, if required in future, we may again approach the Union Cabinet or the Parliament for necessary approvals (additional funds).
The Budget mentioned a tailings policyin the works. Can you share some details?
Mining operations and coal-based plant management generate significant quantities of waste, including mine tailings, residues, slags, coal fly ash, and flue gas, which are often rich in valuable critical minerals. Mine tailings, the fine-grained material left after mineral beneficiation and processing of the primary raw material, contain critical minerals such as cobalt, nickel, vanadium, gallium, indium, and rare earth elements. Recovery of critical minerals from wastes offer some major advantages, if successfully operationalised.
The cost of critical minerals recovery may be significantly reduced as the materials have already been mined and processed to some extent. This will also reduce the overall waste generation of the ongoing metal extraction operations.
India already has an established mining industry which has a strong presence in base metals including iron, aluminium, copper, zinc, lead and tin. These generate significant mining waste.
So, India can address a portion of its critical mineral needs while reducing the environmental impact through a policy on the recovery of critical minerals from secondary sources, including tailings.
How does this tailing policy work?
A policy on the recovery of critical minerals from secondary sources, including tailings, will include liberalising the legal regime for the economic extraction of critical minerals from secondary sources such as coal fly ash, metallurgical slags, mine tailings, and so on.
It will encourage R&D for extraction of various critical minerals found from secondary sources.
The policy shall also try to incorporate funding mechanisms (grants, subsidies, tax benefits) that can support the establishment and scaling up of existing and new recovery facilities by leveraging the National Critical Minerals Mission.
Will it incentivise miners?
Extraction of critical minerals from dumps/tailings is capital intensive and volume is much less. To facilitate extraction of such critical minerals, we want to incentivise miners.
Accordingly, proposal for allowing inclusion of any other mineral including critical minerals in the mining lease on payment of an additional amount specified in new Eighth Schedule of the Act is placed for seeking comments of stakeholders.
Are additional mining reforms being explored?
The Ministry of Mines has undertaken significant reforms in the past 10 years starting from introduction of auction for grant of minerals concession in 2015 to recent reforms in 2023.
In order to further promote ease of doing business(EoDB) as well as fulfilling the objectives of self-sufficiency in critical minerals and to achieve the goal of Viksit Bharat by 2047, my Ministry has issued a consultation paper on certain reforms measures, such as recovery of associated critical minerals; inclusion of contiguous area (not exceeding 10 per cent of existing leased area) in a lease for optimal and scientific mining of deep-seated minerals; widening the scope of National Mineral Exploration Trust to facilitate use of the fund in exploration and mining in overseas and offshore areas; removal of the mineral limestone, laterite and dolomite from the list of minor minerals so as to enhance their production.
Further, a consultation paper on simplifying Average Selling Price (ASP) of Iron ore in the country is also under process of consultation with stakeholders.
Published on February 5, 2025
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