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Subject: Critical Minerals,Rare Earth,Other Minerals

  • Centre notifies two offshore mineral blocks near Great Nicobar

    Why in the News

    The Ministry of Mines has notified two offshore mineral blocks near Great Nicobar Island in the Andaman Sea, covering 1,632 square kilometres between them, for the grant of composite licences. The same metals in the same waters found no bidder in the country’s first ever auction of offshore mineral blocks.

    What is on the seabed, and what does a composite licence allow?

    1. What is down there: Polymetallic nodules and crusts are mineral deposits lying on the ocean floor, nodules scattered like potatoes on sand and crusts formed as a coating on rock.
    2. Why India wants them: They hold nickel, cobalt, manganese, copper and rare earth elements, the inputs to batteries, magnets and electronics that India largely imports.
    3. What the licence obliges: A composite licence under the Offshore Areas Mineral (Development and Regulation) Act, 2002 is not a mining permit. The winner must first explore the block and establish its mineral potential.
    4. The takeaway: The Centre is auctioning the right to prove a deposit rather than a proven deposit, so the bidder carries the exploration cost and the geological uncertainty.

    What exactly has been notified?

    1. West Sewell Ridge 01: The larger block lies off Great Nicobar Island and covers 1,000 square kilometres.
    2. Sewell Rise 01: The second block sits in the southern part of Sewell Rise near the same island and covers 632 square kilometres.
    3. What is being sold: The ministry offers both as composite licences over polymetallic nodules and crusts, the same deposit type in the same stretch of sea.
    4. Where the blocks lie: Both sit inside India’s exclusive economic zone, the sea belt extending 200 nautical miles from the coastal baseline.

    Why did the first offshore auction find no takers?

    1. Blocks put to auction: The ministry put 13 offshore mineral blocks to auction in November 2024.
    2. Where the failure was: The seven blocks near Great Nicobar Island carrying these minerals drew no bid, so the same ground is back on offer.
    3. Auction is the only route: The 2023 amendment to the 2002 Act made competitive bidding the only way to obtain an offshore licence, so a risky block has no negotiated alternative.
    4. No rules, no price: The International Seabed Authority, which licenses seabed mining beyond national waters, has issued no exploitation rules, so a bidder cannot price the work.

    Where does this sit in India’s critical minerals push?

    1. National Critical Mineral Mission: The Ministry of Mines runs a mission launched in 2025 to secure supply of the minerals it has classed as critical, several of which these blocks carry.
    2. Deep Ocean Mission: The Ministry of Earth Sciences runs a parallel mission approved in 2021. Its Matsya 6000 submersible is built to carry a crew to the deep seabed.
    3. India already holds seabed contracts: The International Seabed Authority has granted India exploration rights for nodules in the Central Indian Ocean Basin and for sulphides on the Central Indian Ridge.

    Challenges

    1. No technology at depth: Lifting nodules from the deep seabed at commercial scale has not been demonstrated by any country.
    2. Ecological objection: The waters adjoin protected ground. Eg. Galathea National Park and leatherback turtle nesting beaches.
    3. No refining chain: India lacks the nickel and cobalt refining capacity to turn seabed ore into battery grade metal at home.

    Way Forward

    1. Publish the resource data: The Geological Survey of India and the National Centre for Polar and Ocean Research should release block level estimates before bids close.
    2. Share the exploration risk: Fund a government survey tranche first, so bidders compete over a proven block instead of over a guess.
    3. Build the downstream: Tie any offshore nickel and cobalt to refining capacity created under the critical minerals mission.
    4. Assess the sea before the lease: Require a cumulative environmental assessment for the Andaman Sea before any production lease is granted.

    Conclusion

    Two more blocks are on offer on the same terms that drew no bid, so the notification tests whether the obstacle was the terms or the geology. Watch whether a bidder appears at all, since nothing has changed about what is known to lie on that seabed.

    Matching Previous Year Question

    “[2025] Consider the following statements: Statement I: In India, State Governments have no power for making rules for grant of concessions in respect of extraction of minor minerals even though such minerals are located in their territories. Statement II: In India, the Central Government has the power to notify minor minerals under the relevant law. Which one of the following is correct in respect of the above statements? (a) Both Statement I and Statement II are correct and Statement II explains Statement I (b) Both Statement I and Statement II are correct but Statement II does not explain Statement I (c) Statement I is correct but Statement II is not correct (d) Statement I is not correct but Statement II is correct Answer: (d)”

  • Missing measure in India’s magnet mission

    Why in the News

    China’s tight export controls on rare earth magnets and materials, imposed in April 2025, exposed the dependence of global industrial value chains on a single supplier and the limits of what importing countries know about their own exposure. India has responded by strengthening its critical minerals and rare earth strategy through the National Critical Mineral Mission (NCMM), overseas mineral acquisitions, expanded geological exploration and Production Linked Incentive (PLI) schemes. India’s primary vulnerability does not stem from a shortage of critical minerals. It lies in the absence of a comprehensive framework able to pinpoint where strategic technological dependence is cultivated, accumulated and propagated along the permanent magnet value chain. The tension is that the Annual Survey of Industries (ASI) puts the domestic permanent magnet market at about Rs 750 crore while international trade statistics record import values several times larger than that entire reported market.

    What is a high performance permanent magnet?

    1. About: A permanent magnet holds its magnetic field without a continuous electric current, which is what allows a motor or a generator to convert energy without an external magnetising supply.
    2. The main types: Ferrite, Alnico and Samarium Cobalt magnets continue to serve important industrial applications, each at a different level of strength and temperature tolerance.
    3. Why NdFeB dominates: Neodymium Iron Boron (NdFeB) magnets have become the backbone of the energy transition and advanced manufacturing, because no other commercially available permanent magnet combines comparable magnetic strength with such a high ratio of power to weight.
    4. Where they sit in the economy: Electric vehicle motors, semiconductor fabrication facilities and precision manufacturing machinery all depend on the high performance permanent magnet as a component.

    Where does India’s magnet economy go statistically missing?

    1. The reported market: The Annual Survey of Industries estimates the domestic permanent magnet market at around Rs 750 crore.
    2. The contradiction in the trade data: International trade statistics indicate import values several times larger than that entire reported domestic market.
    3. Possible explanations: The gap may reflect differences in statistical coverage, differences in industrial classification, or supply chain accounting that records the magnet only inside a finished assembly.
    4. What the gap costs policy: Policymakers cannot confidently explain where these magnets enter the economy or how they move through it, so part of the permanent magnet economy exists without being visible in statistics.
    5. A partial statistical picture overall: India’s statistical system provides only a partial account of what is mined, what is imported and what is manufactured.

    Why does the stage structure of the value chain matter?

    1. The upstream sequence: Geological exploration leads to mining, mining feeds mineral processing, and processing enables chemical separation.
    2. The downstream sequence: Separation produces oxides, which are refined into metals, transformed into alloys, engineered into magnetic materials and finally manufactured into finished magnets.
    3. Each stage is a different capability: Every stage demands different scientific knowledge, different industrial capability and a different level of technological maturity.
    4. Where the real question sits: The strategic question is not whether India possesses rare earth resources or whether imports from China can be reduced, it is what happens in between.
    5. Capability without a map of it: India has built capabilities across several stages of magnet manufacturing, and it still lacks a systematic way of identifying where those capabilities are globally competitive, where critical gaps persist, and how dependence accumulates across production stages.

    Can a techno economic map close the dependence gap?

    1. What the framework is: An Integrated Techno Economic Mapping (ITEM) framework brings engineering measurement together with economic measurement to show how a permanent magnet is built, from minerals in the ground to the finished products that use them.
    2. The missing toolkit: Such a framework is at present a missing piece in India’s industrial policy toolkit.
    3. What it would identify: It would show where industrial capability should be built, where technological partnerships become essential, and where domestic investment would yield the greatest strategic return.
    4. Why resources alone are not security: A country may secure mineral resources and still remain dependent if it lacks processing and manufacturing capability, which makes closing the measurement gap an industrial imperative rather than an academic exercise.

    Challenges to India’s rare earth magnet push

    1. Separation and refining is the bottleneck, not ore: Rare earth oxides have to be separated into individual elements before they can be alloyed, and that is the stage at which India has almost no commercial capacity. Eg. China processes over 90% of the world’s rare earths, which is what gives an export control its effect regardless of where the ore was mined.
      The Fix: Tie incentives under the rare earth permanent magnet scheme to certified output at the separation and alloying stages rather than to installed magnet capacity.
    2. Monazite is locked into atomic energy regulation: India’s principal rare earth bearing sand carries thorium, so its processing sits under atomic energy control rather than under ordinary mining law. Eg. Monazite is a prescribed substance under the Atomic Energy Act, 1962, and Indian Rare Earths Limited handles its processing.
      The Fix: Create a licensed private participation route for the non thorium fraction of monazite with a defined custody protocol for the thorium residue.
    3. Heavy rare earths decide magnet grade and India holds few: Dysprosium and terbium are what let an NdFeB magnet hold its field at motor operating temperatures, and India’s deposits are weighted toward the light rare earths. Eg. Indian monazite is rich in cerium, lanthanum and neodymium rather than in dysprosium.
      The Fix: Secure heavy rare earth offtake through overseas acquisition and make a share of every contract conditional on processing inside India.
    4. Recycling has no separated feedstock stream: A magnet recovered from an end of life motor or wind turbine is the one domestic source needing no mining, and no collection channel separates it out. Eg. The E-Waste (Management) Rules, 2022 set extended producer responsibility targets by weight rather than by recovered critical material.
      The Fix: Add a material specific recovery target for rare earth magnets, reported separately from bulk electronic waste tonnage.
    5. Exploration data is too shallow to auction on: A block offered without G1 or G2 level exploration cannot be priced by a bidder, so auctions clear thinly or not at all. Eg. Only about 48% of the mineral blocks auctioned between 2020 and 2023 were sold.
      The Fix: Fund state exploration to G2 level before a critical mineral block is offered, so an auction transfers a defined resource rather than a prospect.

    Conclusion

    India’s rare earth problem is being treated as a supply problem when it is in the first instance a visibility problem. Securing ore, acquiring assets abroad and incentivising magnet capacity all assume the state already knows which stage of the chain its dependence sits at, and no existing statistical instrument tells it. What to watch is whether the next revision of the mission’s monitoring framework records capability stage by stage from ore to finished magnet, because until it does, spending is allocated against a chain the state can describe at both ends and not in the middle.

    Critical Minerals in India

    1. Definition: Critical minerals are minerals essential to a country’s economic development and national security, whose limited availability or concentrated extraction and processing in a few locations can disrupt critical industries.
    2. India’s list: India has identified 30 critical minerals through a three stage assessment, including lithium, cobalt, nickel, rare earth elements, titanium, molybdenum and vanadium.
    3. Selection parameters: The list was drawn on resource availability, import dependency and significance for future technologies, clean energy and agriculture.
    4. Where the demand originates: Solar photovoltaic cells rely on silicon, tellurium, indium and gallium, wind turbines use neodymium and dysprosium, and electric vehicle batteries depend on lithium, nickel and cobalt.

    Government Initiatives for Critical Minerals

    1. Rare Earth Permanent Magnet Manufacturing Scheme, 2025: A scheme with an outlay of Rs 7,280 crore to establish 6,000 tonnes per annum of integrated rare earth permanent magnet capacity for electric vehicles, renewables, aerospace and defence.
    2. Auction of critical mineral blocks: By May 2025, 34 critical and strategic mineral blocks had been auctioned across five tranches, including India’s first potash block.
    3. Royalty rationalisation: Royalty rates for lithium, niobium and rare earth elements were approved in 2023 under the Mines and Minerals (Development and Regulation) Act, 1957, and rates for twelve further critical minerals were specified in 2024, completing rationalisation for all twenty four strategic minerals.
    4. Khanij Bidesh India Limited (KABIL): This joint venture of three public sector undertakings acquires critical mineral assets abroad, with lithium and cobalt as its stated priorities.

    Back2Basics: National Critical Mineral Mission (NCMM)

    1. Ministry and launch: The mission is run by the Ministry of Mines, was announced in the Union Budget for 2024 to 2025 and was launched in 2025 with an outlay of about Rs 16,300 crore.
    2. Scope: It covers the entire value chain, from mineral exploration and mining through beneficiation and processing to recovery from end of life products.
    3. Instruments: It offers financial incentives for exploration, creates a fast track regulatory approval route for critical mineral mining projects, and supports the setting up of mineral processing parks.
    4. Strategic reserve: It provides for building a national stockpile of critical minerals as a buffer against an export restriction by a dominant supplier.

    Matching Previous Year Question

    “Which of the following statements about Rare Earth Elements (REEs) and Critical Minerals is/are correct? 1. Modern technological innovations including Artificial Intelligence, robotics and space exploration extensively utilise Rare Earth Elements (REEs). 2. China has the highest share in mining of REEs followed by India. 3. The Government of India launched the National Critical Mineral Mission (NCMM) in 2025 to establish a robust framework for self-reliance in the critical mineral sector. 4. Rare Earth Elements are a set of 13 metallic elements. Select the answer using the code given below: (a) 1 and 3 only (b) 3 only (c) 1, 3 and 4 (d) 1, 2 and 4”

  • India’s Lohum ships first lithium ore from Zimbabwe

    Why in the News

    Lohum, an Indian producer of critical minerals, has dispatched its first shipment of lithium ore from Zimbabwe. The shipment marks the start of its mining operations in the southern African country and makes it the first domestic company to produce lithium from overseas assets. India has no commercial lithium production of its own, and its battery supply chain runs on imported cells and refined lithium compounds. The tension is that ore is not a battery input until it is converted into a lithium chemical, and that conversion capacity sits almost entirely outside India.

    What does the Zimbabwe holding contain?

    1. The blocks: Lohum has secured rights to 10 lithium mining blocks in Zimbabwe’s Matabeleland South Province, covering about 1,100 hectares.
    2. The resource estimate: The blocks carry estimated deposits of 30 million to 40 million tonnes of ore.
    3. What that converts to: The assets are expected to support production of around 3,00,000 metric tonnes of lithium carbonate equivalent, the standard unit that restates any lithium bearing material as the weight of lithium carbonate it would yield.
    4. The valuation: The holding carries an estimated value of about $7 billion at current prices.

    Why does this matter for India’s mineral security?

    1. The domestic find is not yet a mine: An inferred resource of 5.9 million tonnes of lithium ore at Salal-Haimana in Reasi district, Jammu and Kashmir, announced in 2023, has been put to auction and failed to draw a successful bidder across two rounds.
    2. State led acquisition has moved slowly: Khanij Bidesh India Ltd, a joint venture of National Aluminium Company, Hindustan Copper and Mineral Exploration and Consultancy, signed an exploration and development agreement in January 2024 for five lithium brine blocks in Argentina’s Catamarca province, and that project is still at the exploration stage.
    3. The demand is already committed: Lithium is the irreducible input for the lithium ion cells that India’s electric vehicle programme and its grid storage tenders depend on, and those cells are currently imported.

    Where does Zimbabwe sit in global lithium supply?

    1. Africa’s largest producer: Zimbabwe is the largest lithium producer in Africa and holds the continent’s largest hard rock lithium reserves, in spodumene and petalite bearing pegmatites.
    2. Chinese firms own the major assets: The main producing mines are Chinese owned, including Bikita, Arcadia and Sabi Star, which is why an Indian entry into the country’s lithium sector is notable in itself.
    3. The beneficiation push: Zimbabwe barred exports of unprocessed lithium ore in December 2022 to force value addition inside the country, and has signalled further restrictions on exporting lithium concentrate.

    Challenges to overseas critical mineral acquisition

    1. Host country rules change after the capital is committed: Resource nationalism converts an export project into a processing obligation once the mine is built, and the investor has no exit. Eg. Indonesia banned nickel ore exports in January 2020 and forced foreign investors to build smelters inside the country.
      The Fix: Negotiate a stabilisation clause and a fixed export window into the mining agreement before the first tranche of capital is drawn.
    2. Price risk is severe in this mineral: Lithium prices fell by roughly 80% from their late 2022 peak, which stranded projects sanctioned at the top of the cycle. Eg. Several Australian spodumene operations curtailed output or went on care and maintenance through 2024.
      The Fix: Anchor project financing to a long term offtake contract carrying a floor price, rather than to spot lithium prices.
    3. Refining is the real chokepoint: Ore has no use in a cell until it is converted to battery grade carbonate or hydroxide, and China holds the majority of global lithium chemical refining capacity. Eg. Cell manufacturing under India’s Production Linked Incentive scheme for Advanced Chemistry Cell battery storage still depends on imported cathode active material.
      The Fix: Make an approved domestic conversion plant a condition attached to state support for any overseas mining acquisition.
    4. The logistics run through a third country: Zimbabwe is landlocked, so every tonne of ore moves overland to a port in Mozambique or South Africa before it can be shipped. Eg. The Beira and Durban corridors carry the bulk of Zimbabwe’s mineral exports and are the constraint on volume.
      The Fix: Contract long term rail and port slots on the corridor rather than moving cargo on spot road haulage.

    Conclusion

    An Indian company now has ore coming out of the ground abroad, which is a step no domestic firm had taken before in lithium. What that changes is access to the raw material. What it does not change is the conversion and cell making capacity that turns ore into a battery, which still sits elsewhere. The marker to watch is whether this shipment is followed by a committed conversion facility, in Zimbabwe or in India, since a mining right without a refinery leaves the dependence exactly where it was.

    Back2Basics

    1. National Critical Mineral Mission: Launched in January 2025 and administered by the Ministry of Mines, to build self reliance across the critical mineral value chain.
    2. Outlay: Rs 16,300 crore of government expenditure over seven years, alongside an expected Rs 18,000 crore of investment by public sector undertakings.
    3. Coverage: Exploration within India and in offshore areas, acquisition of mineral assets abroad, recycling of end of life products, stockpiling, and domestic processing capacity.
    4. The list it works from: The 30 minerals identified as critical for India in 2023, which include lithium, cobalt, nickel, graphite and the rare earth elements.

    Matching Previous Year Question

    “[2026] Which of the following statements about Rare Earth Elements (REEs) and Critical Minerals is/are correct? 1. Modern technological innovations including Artificial Intelligence, robotics and space exploration extensively utilise Rare Earth Elements (REEs). 2. China has the highest share in mining of REEs followed by India. 3. The Government of India launched the National Critical Mineral Mission (NCMM) in 2025 to establish a robust framework for self-reliance in the critical mineral sector. 4. Rare Earth Elements are a set of 13 metallic elements. Select the answer using the code given below: (a) 1 and 3 only (b) 3 only (c) 1, 3 and 4 (d) 1, 2 and 4 ANSWER: (a)”

  • Congress-ruled states to move court against new mines law

    Why in the News

    State governments where the Congress is in power are preparing to challenge the Mines and Minerals (Development and Regulation) Amendment Act, 2026 in the Supreme Court, on the ground that it undermines the rights of the States. The Act, passed by the House on 13 August 2026, seeks to curb the power of States to levy taxes on mineral rights and mineral bearing lands. That power was confirmed as belonging to the States by a nine judge Bench two years ago, so the dispute is over whether Parliament can legislate away a taxing entry the Court has read as independent.

    What is the Mines and Minerals (Development and Regulation) Act, 1957?

    1. What it is: The Mines and Minerals (Development and Regulation) Act, 1957, referred to as the MMDR Act, is the parent law governing every mineral in India except petroleum and natural gas.
    2. The core split it creates: The State Government owns the mineral in its territory. The Central Government decides the rules, fixes the royalty rate for major minerals and, for some categories, conducts the auction.
    3. How a block reaches a miner: Someone auctions the block, the State signs the lease, and the company mines. The State signs the lease in every case, including where the Centre ran the auction.
    4. Where the money goes: Royalty, dead rent and the auction premium go to the State in every case, with offshore blocks the only exception.

    What is the current status of State taxing power over minerals in India?

    1. The settled position since 2024: A nine judge Bench of the Supreme Court in Mineral Area Development Authority v Steel Authority of India, decided eight to one in 2024, held that States hold an independent power under Entry 50 of the State List to levy taxes on mineral rights, and that the MMDR Act does not take that power away.
    2. The distinction the ruling rests on: Royalty is not a tax. It is consideration paid to the State as the owner of the mineral, which is why a State levy on mineral rights is a separate and additional exercise of power.
    3. What the ruling overturned: India Cement v State of Tamil Nadu (1990), which had held royalty to be a tax and State cesses on royalty to be beyond State competence, stands overruled.
    4. The recovery window: States may recover past dues from 1 April 2005, in instalments spread over twelve years beginning 1 April 2026, without interest or penalty on the earlier period.
    5. What the ruling did not give the States: It conferred a power to tax mineral rights, not a power to fix the royalty rate. Royalty rates for major minerals continue to be set centrally under the Second Schedule to the MMDR Act.
    6. What the 2026 amendment now does to that position: The Act passed on 13 August 2026 seeks to curb the power of States to levy taxes on mineral rights and mineral bearing lands, which is the power the 2024 ruling had recognised.

    Constitutional Provisions Related to Mineral Rights and Legislative Competence

    1. Entry 54, Union List: Regulation of mines and mineral development, to the extent that Parliament by law declares such Union control to be expedient in the public interest.
    2. Entry 23, State List: Regulation of mines and mineral development, expressly made subject to the provisions of Entry 54 of the Union List.
    3. Entry 50, State List: Taxes on mineral rights, subject to any limitations imposed by Parliament by law relating to mineral development.
    4. Entry 49, State List: Taxes on lands and buildings, the entry under which States tax mineral bearing land.
    5. Entry 55, Union List: Regulation of labour and safety in mines and oilfields.
    6. Article 297: Vests in the Union all lands, minerals and other things of value underlying the ocean within the territorial waters, the continental shelf and the exclusive economic zone.
    7. Article 246: Distributes legislative power between Parliament and the State legislatures across the three Lists.
    8. Article 265: Provides that no tax shall be levied or collected except by authority of law.
    9. Article 131: Confers original jurisdiction on the Supreme Court in a dispute between the Government of India and one or more States, the route through which a State sues over a central statute.

    What is royalty on minerals?

    1. What it is: Royalty is the payment a lessee makes to the owner of the mineral for the mineral removed or consumed, calculated mostly on an ad valorem basis on the average sale price published by the Indian Bureau of Mines.
    2. Who sets it and who receives it: The Centre fixes the rate for major minerals through the Second Schedule to the MMDR Act, and the State fixes it for minor minerals. The State Government receives it in both cases.

    What is a minor mineral?

    1. The statutory definition: Section 3(e) of the MMDR Act names building stones, gravel, ordinary clay and ordinary sand as minor minerals, and allows the Centre to notify any other mineral as minor. Everything not notified as minor is a major mineral, defined negatively with no positive list.
    2. Who controls them: Section 15 gives States exclusive power to frame minor mineral rules and to fix minor mineral royalty, so the Centre’s power over minor minerals is limited to deciding what enters the category.

    What does the Mines and Minerals (Development and Regulation) Amendment Act, 2026 change?

    1. The core change: The Act seeks to curb the power of States to levy taxes on mineral rights and on mineral bearing lands.
    2. The scope claimed for it: The Centre states that it is seeking to regulate only major minerals such as coal, limestone, iron ore, copper and manganese.
    3. What is stated to be left untouched: The States would continue to have powers over 49 minor minerals.
    4. The stated purpose: The Union Minister of Mines told the Rajya Sabha that the legislation does not seek to interfere with the autonomy or revenue rights of States, and that it aims only to ensure uniform mineral rates across the country.
    5. The stage it has reached: The Act was passed by the House on 13 August 2026.

    Which States are challenging the Act and on what ground?

    1. The States on board: Karnataka, Telangana and Himachal Pradesh are already committed to challenging the amendment Act in the Supreme Court.
    2. The State still being negotiated: The Congress is in talks with its ally the Jharkhand Mukti Morcha to get the Jharkhand government to join the challenge.
    3. The stated ground: The party alleges that the law undermines the rights of the States.
    4. The demand short of litigation: The Karnataka Deputy Chief Minister urged the Centre to withdraw the amendment Act, objecting to its restrictive provisions.
    5. The federal framing from Kerala: The Kerala Chief Minister stated that the amendments to the Act are against federal principles.

    How can a State challenge a central law?

    1. The original suit route: A State may institute an original suit against the Government of India in the Supreme Court under Article 131, which is the route available where the dispute involves a question on which a legal right of the State depends.
    2. The writ route is not open to a State in the same way: Article 32 is a remedy for enforcement of fundamental rights, and a State is not a person entitled to fundamental rights, so a State ordinarily proceeds under Article 131 rather than Article 32.
    3. Why the choice of route matters here: An Article 131 suit frames the matter as a Centre State dispute over legislative competence rather than as a grievance of an affected mining company.
    4. The competence question that will be argued: The dispute turns on whether the 2026 Act is a limitation of the kind Entry 50 permits Parliament to impose, or an extinguishing of the entry itself.
    5. The precedent that will be relied on: The 2024 nine judge ruling held that the MMDR Act as it then stood did not take away the Entry 50 power, which leaves open whether a later Act can impose limitations that empty it.

    Major debates surrounding State taxation of mineral rights

    1. Ownership against regulation: The State owns the mineral and receives the royalty, while the Centre fixes the rate and writes the rules, so the party bearing the social and environmental cost of mining does not set the price of it.
    2. Competing readings of one entry: Entry 50 is read either as a State power with a boundary Parliament may draw, or as a power Parliament may narrow until nothing is left of it.
    3. A tax entry against a regulatory entry: Entry 54 of the Union List is a regulatory entry over mineral development, and the question is whether a regulatory power carries with it the power to restrict a taxing entry in the State List.
    4. Two landmark rulings in tension: India Cement (1990) treated royalty as a tax and denied State competence, and Mineral Area Development Authority (2024) treated royalty as consideration and affirmed it, so the sector has operated under opposite rules within one generation.
    5. Uniform rates against fiscal autonomy: Uniform mineral rates across the country lower input cost volatility for steel, aluminium, cement and power, and remove a revenue instrument from the States where those minerals lie.
    6. The retrospective recovery question: Permitting recovery of dues from 1 April 2005 in instalments from 1 April 2026 exposes mineral users to a large accumulated liability, which is the practical trigger for legislative intervention.
    7. The empirical gap the dispute turns on: There is no agreed estimate of what the recovered dues and future State levies would add to the delivered cost of coal, iron ore and limestone, so both the revenue claim and the input cost claim rest on projections.

    Challenges to the new mineral taxation framework

    1. A single change alters two revenue streams at once: Curbing taxes on mineral rights and on mineral bearing lands touches Entry 50 and Entry 49 together, so States lose both an activity based and a property based levy. Eg. Several mineral States had begun framing levies immediately after the 2024 ruling recognised the Entry 50 power.
    2. Litigation freezes revenue planning on both sides: States cannot budget on a levy under challenge, and miners cannot provide for a liability that may be extinguished. Eg. Karnataka, Telangana and Himachal Pradesh have already committed to moving the Supreme Court against the Act.
    3. Uniform national rates ignore differences in deposit quality: A single rate across States taxes a high grade and a low grade deposit identically, which penalises the State with the harder ore body. Eg. Iron ore grades differ sharply between Odisha, Karnataka and Goa, with different beneficiation costs.
    4. The retrospective window collides with the amendment: Recovery of dues from 1 April 2005 was to start in instalments from 1 April 2026, the same period in which the curbing Act was passed. Eg. The twelve year instalment schedule the Court allowed begins precisely when the new restriction takes effect.
    5. The distinction between royalty and tax remains contestable in practice: A State levy structured on the royalty amount can be characterised as a tax on mineral rights or as a levy on land, which invites classification disputes at every notification. Eg. District Mineral Foundation contributions are already computed on the royalty amount rather than on sale value.
    6. Mining States bear the externalities regardless of the tax outcome: Land degradation, dust pollution, groundwater disruption and displacement fall on the district whether or not the State can levy. Eg. The mineral belt overlaps the Fifth Schedule tribal belt almost exactly.
    7. Investment decisions stall while competence is unsettled: Long gestation mining projects require certainty on the total payment stack over a fifty year lease. Eg. A mining lease under the MMDR Act runs for fifty years, far longer than the litigation cycle over the levy.

    Conclusion

    The Mines and Minerals (Development and Regulation) Amendment Act, 2026 has been passed by the House on 13 August 2026 and seeks to curb State powers to tax mineral rights and mineral bearing lands. The next step is a challenge in the Supreme Court, with Karnataka, Telangana and Himachal Pradesh committed and Jharkhand still under negotiation, and the source states no date for filing. The dispute is not about who owns the mineral, which is settled, but about whether a taxing entry in the State List can be narrowed by a central law made under a regulatory entry in the Union List. Until that is answered, the sector operates with two revenue claims on the same rupee.

    “[2025] Consider the following statements:

    Statement I: In India, State Governments have no power for making rules for grant of concessions in respect of extraction of minor minerals even though such minerals are located in their territories.

    Statement II: In India, the Central Government has the power to notify minor minerals under the relevant law.

    Which one of the following is correct in respect of the above statements?

    (a) Both Statement I and Statement II are correct and Statement II explains Statement I

    (b) Both Statement I and Statement II are correct but Statement II does not explain Statement I

    (c) Statement I is correct but Statement II is not correct

    (d) Statement I is not correct but Statement II is correct |

  • Strategic stockpiling of critical minerals under the National Critical Mineral Mission

    Why in the News

    India committed Rs 500 crore in 2025 towards critical mineral stockpiling under the National Critical Mineral Mission (NCMM). The commitment exposes a tension between long gestation domestic mining and the immediate supply risk that flows from dependence on China for processed minerals and rare earth elements.

    What is the National Critical Mineral Mission (NCMM)?

    1. Mandate: The NCMM is a scheme launched in 2025 to build a framework for self reliance across the critical mineral value chain, from exploration to processing.
    2. Stockpiling seed: It allocated Rs 500 crore in 2025 towards building strategic reserves of critical minerals.

    What are critical minerals and rare earth elements?

    1. Critical minerals: These are minerals essential to the economy and national security whose supply faces a high risk of disruption, such as lithium and cobalt.
    2. Rare earth elements (REEs): These are a set of 17 metallic elements used in permanent magnets, electronics and defence systems, most of which are refined in China.

    Why must a reserve hold processed minerals and not raw ores?

    1. Refining lead time: Converting raw ore into usable inputs needs onshore capacity with a long lead time, so raw stock is of little use during a shock.
    2. Composition rule: A reserve must hold refined rare earth oxides, processed minerals and finished components such as permanent magnets.
    3. Midstream gap: India’s midstream refining capacity is nascent, so supply agreements must cover intermediate goods rather than raw material.
    4. Storage integrity: Refined oxides are sensitive to moisture and oxidation, requiring climate controlled and nitrogen atmosphere warehousing.
    5. Rotation cycle: Reserves cannot stay static, so the government must release older stock into the market while procuring fresh supplies.

    What do international frameworks show about coordinated stockpiling?

    1. Quad Critical Minerals Initiative Framework: The Quadrilateral Security Dialogue (Quad) launched this USD 20 billion framework in 2025 to fortify regional supply chains.
    2. G7 Evian summit 2026: The Group of Seven (G7) reiterated a commitment to establishing a standards based market for critical minerals.
    3. Modelling caution: If seven major economies simultaneously built six month reserves, aggregate demand could consume 34% of annual global cobalt supply and 10% of lithium supply.

    Why can uncoordinated stockpiling worsen the shortage it aims to solve?

    1. Demand inflation: Uncoordinated buying inflates global demand and deepens the very shortages stockpiling is meant to ease.
    2. Volatility risk: It heightens the price volatility that a reserve is supposed to hedge against.
    3. Limits of price floors: A guaranteed minimum purchase price addresses underinvestment but rarely addresses scarcity.
    4. Dynamic price bands: A band with a floor near USD 12,000 and a ceiling near USD 30,000 triggers coordinated buying below the floor and releases above the ceiling.

    What are the challenges to critical mineral stockpiling?

    1. Capital intensity: Specialised storage demands heavy and continuous capital expenditure, commercial expertise and multi stakeholder involvement.
    2. Material decay: Reserves risk technological obsolescence and physical decay unless constantly rotated. (Nickel and cobalt powders or precursor materials must be constantly tested and rotated back into active commercial supply chains before their chemical integrity drops.)
    3. Access in friend shoring: Collaboration with industrialised powers requires hedging mechanisms so access matches the size of India’s contribution.
    4. Delayed releases: Reserve releases can be blocked by vetoes, so pre agreed market and geopolitical triggers are needed to automate them.
    5. Sidelining of emerging economies: Larger consumers can crowd out India unless minimum guaranteed allocation baselines are fixed.
    6. China concentration: China dominates the mining and processing of several rare earths, giving it leverage over prices and export flows. Past export restrictions on gallium, germanium, and graphite demonstrated how Beijing’s dominance allows it to instantly manipulate global export flows and drive up input costs for rival manufacturing nations.

    Conclusion

    India’s optimal strategy is to join a coordinated stockpiling platform, potentially housed within the G7, which also covers Quad members. This lets India tap a mature ecosystem without bearing the full cost of independent reserves, provided it secures staggered procurement, automatic release triggers and guaranteed allocation baselines.

    Back2Basics:

    National Critical Mineral Mission (NCMM)

    1. Nodal ministry: Ministry of Mines.
    2. Launched: 2025.
    3. Aim: self reliance across the critical mineral value chain covering exploration, mining, processing and recycling.
    4. Coverage: domestic exploration, overseas asset acquisition, stockpiling and building a processing ecosystem.
    5. Stockpiling outlay: Rs 500 crore seeded in 2025.

    PYQ Relevance

    “[2026] Which of the following statements about Rare Earth Elements (REEs) and Critical Minerals is/are correct?
    1. Modern technological innovations including Artificial Intelligence, robotics and space exploration extensively utilise Rare Earth Elements (REEs).
    2. China has the highest share in mining of REEs followed by India.
    3. The Government of India launched the National Critical Mineral Mission (NCMM) in 2025 to establish a robust framework for self-reliance in the critical mineral sector.
    4. Rare Earth Elements are a set of 13 metallic elements.
    (a) 1 and 3 only
    (b) 3 only
    (c) 1, 3 and 4
    (d) 1, 2 and 4

  • With reference to India, consider the following statements

    With reference to India, consider the following statements :
    1. Monazite is a source of rare earths.
    2. Monazite contains thorium.
    3. Monazite occurs naturally in the entire Indian coastal sands in India.
    4. In India, Government bodies only can process or export monazite.
    Which of the statements given above are correct ?

  • Consider the following statements

    Consider the following statements:
    Statement I: In India, State Governments have no power for making rules for grant of concessions in respect of extraction of minor minerals even though such minerals are located in their territories.
    Statement II: In India, the Central Government has the power to notify minor minerals under the relevant law.
    Which one of the following is correct in respect of the above statements?

  • Consider the following statements

    Consider the following statements:
    Statement I: Some rare earth elements are used in the manufacture of flat television screens and computer monitors.
    Statement II: Some rare earth elements have phosphorescent properties.
    Which one of the following is correct in respect of the above statements?

  • With reference to the public Sector Undertaking in India, consider the following statements

    With reference to the public Sector Undertaking in India, consider the following statements :
    1. Minerals and Metals Trading Corporation of India Limited is the largest non-oil importer of the country.
    2. Project and Equipment Corporation of India Limited is under the Ministry of Industry.
    3. One of the objectives of Export Credit Guarantee Corporation of India Limited is to enforce quality control and compulsory pre-shipment inspection of various exportable commodities
    Which of these statements is/are correct?

  • Match List I (Minerals) with List II (Location) and select the correct answer.

    Match List I (Minerals) with List II (Location) and select the correct answer.
    List I
    (A) Coal
    (B) Copper
    (C) Manganese
    (D) Lignite

    List II
    1. Giridih
    2. Jayamkondam
    3. Alwar
    4. Dharwar