Why India is making mining of graphite more lucrative: It’s about your next EV

The Union Cabinet On Wednesday approved the royalty rate for caesium, Graphite, Rubidium and Zirconium. The higher royalty of these minerals aimed at increasing the domestic and mining production.  

Amid the hassle of enhancing the critical minerals, the Union government is seeking to strengthen the energy and supply chain by producing local output.  

“The decision of the 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 and niobium,” as said by the official in the cabinet meeting.  

However, India imports about 60 per cent of its requirement of Graphite. At present, 9 Graphite mines are working in the country and further 27 blocks have been successfully auctioned. Further, GSI and MECL have handed over 20 Graphite blocks which will be auctioned and around 26 blocks are under exploration.

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Graphite being a crucial element in electric vehicle (EV) batteries, primarily serving as the anode material, enables high conductivity and charge capacity. With over 80 per cent carbon will attract a 2 per cent royalty on average selling price while grads draw 4 per cent.  

“The royalty rate of Graphite has been specified on rupees per tonne basis since 1st September, 2014. It is the only mineral in the list of critical and strategic minerals whose royalty rate was specified on a per tonne basis,” the cabinet said in its statement.  

Union Minister of Railways, Ashwini Vaishnaw said that the royalty introduced will now be ad valorem.