Critical minerals are a strategic asset

•Syllabus: Energy*

Source: IE

Context: India’s push for clean energy, electronics, and strategic technologies has placed critical minerals like lithium, cobalt, and rare earths at the center of policy discourse.

• The National Critical Mineral Mission (NCMM) and recent export restrictions by China have highlighted India’s vulnerability and the need for self-reliance.

About Critical minerals are a strategic asset:

• Definition: Minerals essential to economic security and clean energy, with limited domestic availability and high geopolitical risk.

• Examples: Lithium, Cobalt, Nickel, Graphite, Rare Earth Elements, Silicon.

• Importance: Core to EVs, solar panels, semiconductors, wind turbines, defence, and telecom.

Strategic Importance for India:

• Energy Transition: 100% import dependence on lithium, cobalt, and rare earths threatens India’s EV and battery plans.

• Tech Sovereignty: Strategic autonomy in telecom, AI, defence depends on mineral access.

• Geopolitical Leverage: Reducing China-centric dependence helps assert India’s position in the Indo-Pacific and Quad.

• Industrial Ambitions: PLI schemes for electronics, EVs, and solar require secure raw material input.

• National Security: Rare earths are vital for surveillance, navigation, and missile systems.

Key Policy Measures by India:

• National Critical Mineral Mission (NCMM): Formed in 2024 under Ministry of Mines. Mandate: Secure critical mineral supply chains through exploration, refining, and strategic reserves.

• Formed in 2024 under Ministry of Mines.

• Mandate: Secure critical mineral supply chains through exploration, refining, and strategic reserves.

• Amendment to MMDR Act: Allowed auction of 30 identified minerals. 5 auction rounds concluded; over 400 exploration projects planned.

• Allowed auction of 30 identified minerals.

• 5 auction rounds concluded; over 400 exploration projects planned.

• International Partnerships: Mineral Security Partnership (MSP) with U.S., Australia. Bilateral MoUs with Argentina, Bolivia for lithium. Engagement via Quad, G20, BRICS.

• Mineral Security Partnership (MSP) with U.S., Australia.

• Bilateral MoUs with Argentina, Bolivia for lithium.

• Engagement via Quad, G20, BRICS.

Challenges in India’s Critical Mineral Ecosystem:

• High Import Dependence:

• India imports 100% of lithium, cobalt, rare earths. China controls 70–90% of midstream processing globally.

• India imports 100% of lithium, cobalt, rare earths.

• China controls 70–90% of midstream processing globally.

• Underdeveloped Domestic Capacity:

• Only preliminary exploration underway. Refining, separation, and value addition infrastructure lacking.

• Only preliminary exploration underway.

• Refining, separation, and value addition infrastructure lacking.

• Weak Private Sector Participation:

• Auctions saw low interest due to technical and financial entry barriers.

• ESG and Tribal Concerns:

• Most mineral blocks lie in ecologically or tribally sensitive areas. Legal delays due to poor Environmental, Social, and Governance compliance.

• Most mineral blocks lie in ecologically or tribally sensitive areas.

• Legal delays due to poor Environmental, Social, and Governance compliance.

• Lack of Circular Economy Infrastructure:

• Battery and e-waste recycling is informal and fragmented. No formal collection/dismantling infrastructure or incentives.

• Battery and e-waste recycling is informal and fragmented.

• No formal collection/dismantling infrastructure or incentives.

Strategic Way Forward:

• Midstream Infrastructure Development:

• Create mineral processing zones with PLI-style incentives. Encourage public–private partnerships in refining and conversion tech.

• Create mineral processing zones with PLI-style incentives.

• Encourage public–private partnerships in refining and conversion tech.

• Strengthen Exploration and Auctions:

• Build GSI’s survey capabilities. De-risk projects for investors with geodata and viability gap funding.

• Build GSI’s survey capabilities.

• De-risk projects for investors with geodata and viability gap funding.

• Green and Inclusive Mining:

• Mandate ESG frameworks, third-party audits, and community benefit-sharing. Ensure fast environmental clearances without compromising on standard.

• Mandate ESG frameworks, third-party audits, and community benefit-sharing.

• Ensure fast environmental clearances without compromising on standard.

• Build Circularity:

• Invest in formal battery/electronics recycling infrastructure.

• Provide tax breaks, subsidies for high-efficiency recovery systems.

• Diversify Global Supply Chains:

• Pursue “friendshoring” with trusted nations. Leverage diplomacy to ensure stable, long-term mineral trade pacts.

• Pursue “friendshoring” with trusted nations.

• Leverage diplomacy to ensure stable, long-term mineral trade pacts.

Conclusion:

Critical minerals are the backbone of future industrial, environmental, and strategic advancement. While India has taken bold initial steps through NCMM, its success depends on sustained policy reforms, global alignment, and ecosystem capacity-building. The roadmap ahead must embrace self-reliance (Atmanirbharta) while ensuring sustainability, community equity, and strategic foresight.