Examine the significance of critical minerals for India. What challenges persist in building a resilient domestic value chain? What are the policy measures undertaken to secure the same? (10M, 150 Words)

Answer:

Critical minerals such as lithium, cobalt, nickel, graphite and rare earth elements (REEs) are indispensable for clean energy technologies, advanced electronics, defence systems and digital infrastructure. Recognising their strategic importance, India notified a list of 30 critical minerals (2023) and launched the National Critical Mineral Mission (NCMM) with an allocation of ₹16,300 crore, signalling a shift from resource management to mineral security as a core national strategy.

Significance of Critical minerals for India:

1.    Energy transition goals: India targets 500 GW of non-fossil fuel capacity by 2030 and Net Zero by 2070. Lithium and cobalt are central to EV batteries and energy storage.

2.   Industrial competitiveness:

• Gallium, germanium and silicon are critical for semiconductors and electronics.
• India’s PLI schemes cover at least seven sectors dependent on critical minerals, including electronics, solar PV, telecom, and Advanced Chemistry Cell batteries.

3.   Strengthening national security:

• China controls about 90% of global rare earth processing and 40% of cobalt, lithium and REE refining capacity (IEA data).
• Overdependence exposes India to geopolitical coercion and supply disruptions.

4.   Infrastructure Imperative:

• India has 37.37 billion tonnes of coking coal reserves, yet imports rose from 51.2 MT (2020–21) to 57.58 MT (2024–25).
• Nearly 95% of steel industry requirement is import-dependent. Classifying coking coal as a critical mineral strengthens industrial resilience.

Challenges persist in building a resilient domestic value chain:

1.    Exploration deficit: Mineral discovery timelines often exceed 10–15 years. Limited deep-seated exploration and geological mapping gaps hinder exploration.

2.   Processing constraints: India lacks high-purity refining capacity for lithium and REEs. Most processing is concentrated in China.

3.   Import dependence: Top 3 mining and refining countries dominate global supply as per IEA data. Market concentration further increases vulnerability.

4.   Weak domestic recycling infrastructure: Limited recovery rates for lithium, cobalt and REEs. Absence of large-scale battery recycling plants hindering infrastructure improvement.

Policy measures needed:

1.    National Critical Mineral Mission (NCMM):

• With ₹16,300 crore allocation, focus is on exploration, processing, overseas asset acquisition and R&D.
• It supports building domestic capacity across value chain.

2.   Regulatory reforms:

• MMDR Amendment Act (2021) enabled private participation in exploration.
• Strengthening of NMET and opening exploration to junior miners.

3.   Overseas asset acquisition: Khanij Bidesh India Ltd (KABIL) pursuing lithium blocks in Argentina and Australia to reduce concentration risk.

4.   Downstream manufacturing push:

• PLI schemes incentivise domestic production of solar modules, EV batteries, telecom equipment.
• The aim is to move from raw extraction to advanced manufacturing.

Conclusion:

In the era of clean energy and technological competition, critical mineral security is not merely an economic necessity but a strategic imperative for India’s sustainable growth and geopolitical resilience.

‘+1’ Value Addition:

• IEA projects mineral demand for clean energy technologies could rise 4 – 6 times by 2040.
• 69 globally critical minerals were benchmarked before finalising India’s 30-mineral list.
• China dominates 90% rare earth processing, creating strategic chokepoints.
• Recycling could meet up to 20 – 30% of lithium demand globally by 2040 as per the IEA estimates.

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