NMDC, GMDC and MOIL shares are soaring in today's session — Here's why

A lower royalty rate has brought some cheer to the street unless it is specifically mentioned that these minerals would be subject to a 12% rate of the average sale price.

The cabinet has fixed royalty rates lower as these minerals have assumed utmost importance in India's economic advancement and national security. These critical minerals are important as the country move towards its carbon neutrality goals.

This also encourages indigenous mining and so will lead to reduction in imports and setting up of related industries and infrastructure projects, thereby enhancing employment generation within the mining sector.

However, one must keep in mind that this is just a stepping stone and the government is currently exploring any deposits available for strategic minerals.

GMDC has been talking up the opportunity but it needs to be seen whether some fixed announcements are made on the rare earth opportunity. There is long way to go from exploration, auctioning, getting environment clearances, setting infrastructure and lastly commissioning.

The street believes that the production is still a few years away. But the stocks are outperforming in a sluggish market.