Budget 2024: Critical Minerals put on mission mode

The budget announced a Critical Mineral Mission, which will be supplemented by reduced import duties on important minerals such as lithium to aid setting up of beneficiation plants in the country. In addition, the government will also auction blocks for extracting offshore minerals "We will set up a Critical Mineral Mission for domestic production, recycling of critical minerals and overseas acquisition of critical mineral assets," FM Nirmala Sitharaman said in her budget speech.

According to Union Mines Minister G Kishan Reddy, "This move is significant for shielding India from elevated levels of import reliance and supply risks owing to the global trends of geo-political turbulence."

Further, the zero import duty on blister copper will stabilise the supply chain for copper refiners, crucial for industries such as electronics and construction, and enhance the global competitiveness of Indian copper products. Sector watchers said initiatives of the mines ministry found mention in the budget speech after almost a decade. The last time mines figured in the budget speech was when the Mines and Minerals (Development and Regulation) Act was to be amended, they said. "This mission will have autonomy in decision-making and will be supported by a budget to support activities such as overseas acquisitions of assets and setting up critical mineral beneficiation plants," a senior official told ET . Besides the policy push for critical minerals, the finance minister announced sweeping changes in import tariffs to help industries that use them. She said that minerals such as lithium, copper, cobalt and rare earth elements are critical for sectors including nuclear energy, renewable energy, space, defence, telecommunications and high-tech electronics. "I propose to fully exempt customs duties on 25 critical minerals and reduce basic customs duty on two of them. This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors," Sitharaman said.

Import duties on 25 critical minerals such as lithium, cobalt and copper ranged from 2.5% to 10%. These have now been slashed to zero. Duties on graphite, silicon quartz and silicon dioxide have been lowered to 2.5% from 5-7.5%. "This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors," the FM said.