India considers lithium mining royalty at 3% of LME price- govt sources

14th June 2023

By: Reuters


Font size: - +

NEW DELHI - India's federal government plans to fix the rate of royalty that mining companies must pay for extracting lithium at 3% of the prices prevailing at the London Metal Exchange (LME), two government sources said.

India, which has been exploring ways to secure supplies of lithium - a critical raw material used to make electric vehicle batteries - in February found its first lithium deposits in the federally administered region of Jammu and Kashmir.

The government is expected to auction the newly found lithium blocks, with estimated reserves of 5.9-million tonnes, later this year.

At least a dozen Indian and foreign companies such as Adani Enterprises ADEL.NS, Vedanta Ltd VDAN.NS, Reliance Industries, Jindal Steel and Power, Himadri Chemicals and Korea's LX International are likely to take part in the auction, said the sources, asking not to be named as the information is not public.

India's cabinet is expected to consider the proposal of fixing the rate of royalty for lithium mining at 3% of the rates prevailing at LME, they said.

The Ministry of Mines did not immediately respond to a request for comment.

The rate of royalty - to be paid to the local administration of Jammu and Kashmir - would be a major step towards the country's first auction of its lithium blocks, the sources said.

India's federal mines ministry fixes royalty rates, but the revenue goes to state governments or federally administrated territories.

India has previously used the LME benchmark to fix the royalty rate for bauxite mining, the sources said.

"We studied the royalty rates in other lithium mining countries," said one of the sources. "The royalty rates in Australia is also 3% of LME and (it) is 4.5% of LME in Argentina, Bolivia and Chile - called the lithium triangle."

India's plans to auction its lithium reserve - estimated as the seventh largest deposit - comes amid a push by major economies to secure lithium supplies.

The United States, Canada and other countries have established a new partnership aimed at securing the supply of critical minerals, including lithium.

Edited by Reuters


The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?