Budget 2025:  Nil custom duties on waste and scrap of 12 critical minerals

India has scrapped Customs duty on waste and scrap of a dozen critical minerals, while a comprehensive tailings policy – to recover such strategically important minerals from byproducts of mining activities - is in the works, Finance Minister Nirmala Sitharaman said in the Budget presentation.

This is the second straight year when a critical mineral security program – whereby the country looks to secure supplies of minerals that are of strategic importance towards its move to green-tech and clean-tech – find mention in the Budget; and there are policy interventions to this end.

India scrapped Customs duty on waste and scrap of antimony, cobalt, tungsten and copper scrap, among others. Customs duties on waste and scrap of lithium-ion battery, as well as waste and scrap of lead, zinc and cobalt powder were also scrapped.

Other critical minerals in the list included waste and scrap of antimony, beryllium, bismuth, cadmium, molybdenum, rhenium, tantalum, tin, tungsten and zirconium.

“In the July 2024 Budget, I had fully exempted BCD on 25 critical minerals that are not domestically available. I had also reduced BCD of 2 other such minerals to provide a major fillip to their processing especially by MSMEs. Now, I propose to fully exempt cobalt powder and waste, the scrap of lithium-ion battery, lead, zinc and 12 more critical minerals. This will help secure their availability for manufacturing in India,” Sitharaman said during her speech.

Mining sector reforms, including those for minor minerals, will be encouraged through sharing of best practices and institution of a State Mining Index, as per Budget proposals.

According to Arun Misra, MD and CEO, Hindustan Zinc, the mining reforms prposed position India as a key player in the critical minerals sector. “Institutionalising a State Mining Index for minor minerals along with a policy for recovery of critical minerals from tailings will enable circularity and innovation within the industry,” he said.

Days before the Budget, the Cabinet had cleared the ₹16,300 crore National Critical Minerals Mission, with an additional funding of ₹18,000 crore to be raised from PSUs. Securing supplies – domestic sources and overseas, acquiring mines overseas, setting up processing capacities are amongst the few parts of the Mission.

In fact, the Economic Survey released by the country’s Chief Economic Advisor has also mentioned the need for India to tap global tech tie-ups and partnerships so that it can secure critical minerals like lithium, molybdenum, vanadium, rare earth elements, among others.

India will also be working on a policy for recovery of critical minerals from tailings. “...policy for recovery of critical minerals from tailings will be brought out,” the Budget document said.

In mining parlance, a “tailings policy” refer to a set of regulations and guidelines that dictate how mining companies must manage and dispose of tailings – or fine-grained waste materials left over after the valuable minerals are extracted from ore during processing. This is essentially a safety and environmental requirement for storing and handling these potentially hazardous byproducts. However, over the last few years a number of technologies have been developed and used successfully to recover critical minerals from mine tailings. Principally, most of these technologies are hydrometallurgical based such as froth flotation, solvent extraction and bio-hydrometallurgy.

“By enabling the recovery of valuable critical minerals from mining tailings, this policy will enhance domestic availability thereby strengthening our strategic industries, including clean energy, semiconductors, defence, and space. Investing in research and development for efficient recovery processes will strengthen India’s self-reliance in critical mineral supply chains,” Union Minister for Mines, GK Reddy said.

According to Abhyuday Jindal, MD, Jindal Stainless Ltd, focus on mining sector reforms — such as policies to recover critical minerals from tailings, reducing import duties on essential raw materials not produced domestically, and offering incentives for intra-state power transmission — represents a positive and forward-thinking step.