Budget 2024: Government Announces Support For Critical Minerals Via Missions, Duty Exemptions
Mining companies involved in exploration, mining, and processing of critical minerals stand to benefit from the move.
The central government will set up a critical mineral mission for domestic exploration, recycling of minerals and overseas acquisition of critical mineral assets, Finance Minister Nirmala Sitharaman said in her 2024 Union Budget speech on Tuesday.
The mandate of the mission is said to include technology development, an extended producer responsibility framework, a skilled workforce and a suitable financing mechanism, Sitharaman said.
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Offshore Mining
The government will launch the auction of India's first tranche of offshore blocks for mining, building on the exploration that has already been carried out, Sitharaman said.
Customs Duty
Critical minerals like lithium, copper, cobalt and rare earth elements are crucial for sectors such as nuclear and renewable energy, space, defence, telecommunications, and high-tech electronics, she said.
Sitharaman proposed to fully exempt customs duties on 25 critical minerals and reduce the basis of customs duties on two of them. Some of the 25 critical minerals exempted from duty include cobalt, copper, lithium, nickel, potash, tin, tungsten, and more.
The two minerals that will see a reduction in duty include graphite, silicon quartz and silicon dioxide. The duties will be reduced from 7.5% to 2.5%, according to the budget document.
This will not only provide a major fillip to the processing and refining of stated minerals but also help secure their availability for these strategic and important sectors, she said.
Sectors That Benefit
Mining companies involved in the exploration, mining, and processing of critical minerals stand to benefit from the move.
It is also positive for recycling businesses as well as companies involved in the technology development for exploration, extraction, processing, and substitution of critical minerals.
Furthermore, manufacturers who rely on critical minerals for sectors like renewable energy, space, defence, telecommunication, and high-tech electronics will benefit from the increased availability and potentially lower costs.
