Ahead of India's first auction for offshore minerals, the central government has released updated royalty rates for construction sand, polymetallic nodules, and overburden, alongside a revision of rates for dolomite. This shift aligns with the country’s strategy to auction 20 mineral blocks, marking a significant expansion under the Offshore Areas Mineral (Development and Regulation) Act, 2002.
The initial framework under the 2002 Act focused on a limited set of minerals such as ilmenite, rutile, zircon, and gold. Now, with a broader array of resources being made available, the government is adjusting rates to account for both market demand and the unique commercial value of these minerals, according to a Business Standard report.
According to the proposed rates, construction sand—commonly found in seabed deposits—will attract a royalty of Rs 40 per tonne. Polymetallic nodules, valued for their high metal content including manganese and nickel, will be subject to a royalty of 3 percent of the average sale price. For overburden or waste material, often containing trace minerals, a rate of Rs 10 per tonne has been proposed.
The royalty for dolomite, a mineral widely used in steelmaking and construction, is set to increase from Rs 40 to Rs 50 per tonne. Limestone and lime mud, critical to cement production, are also slated for this revised rate.
Other minerals have been assigned ad valorem royalties, meaning that they are calculated as a percentage of the mineral’s sale value. Brown ilmenite, ilmenite, rutile, and zircon, essential for titanium and zirconium production, will incur a royalty of 2 percent of the sale price. Garnet and manganese ore will be taxed at 3 percent, while sillimanite will carry a rate of 2.5 percent. Minerals not specifically named will default to a royalty of 10 percent of the sale price.
Precious metals are also covered under this scheme, with gold subject to a 1.5 percent royalty based on the London Bullion Market Association price, while silver incurs a 5 percent royalty on the London Metal Exchange price. Monazite, another significant mineral, carries a fixed rate of Rs 125 per tonne.
With its diverse offshore mineral resources, India is aiming to meet both industrial and high-tech manufacturing needs through these auctions. As the government prepares for these mineral block bids, these updated royalty rates reflect India’s strategic intent to optimise its offshore resource management.
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