Critical Minerals: India's Strategic Imperative
Why Critical?
| Mineral | Key Applications | Import Dependency |
|---|---|---|
| Lithium | EV batteries, grid storage | 100% |
| Rare Earths (REEs) | Defense tech (missiles), electronics | 100% |
| Cobalt | Aerospace alloys, batteries | 100% |
| Graphite | Battery anodes, nuclear reactors | 90% |
Geopolitical Risks:
- China's Dominance: Controls 90% REE refining, 60-70% lithium/cobalt processing.
- Supply Chain Vulnerability: Export curbs (e.g., China’s 2023 REE restrictions) disrupt EV/defense sectors.
India's Policy Response
1. Institutional Framework
- National Critical Minerals Mission (NCMM, 2025):
- Secure supply chains via exploration, processing, recycling.
- Identified 30 Critical Minerals (MoM, 2022): Includes Ni, Cu, Mo for strategic tech.
2. Auction & Exploration
- MMDR Act Amendments: 5 auction rounds (latest Jan 2025).
- Exploration Boost: 195 projects (2024) → 227 approved (2025).
- Bottlenecks: Low bids due to high costs, tech gaps, weak midstream capacity.
3. Midstream Solutions
- Mineral Processing Zones: PLI schemes for battery-grade refining.
- Private Investment: Tax incentives for lithium/REE processing plants.
Challenges & Solutions
| Challenge | Solution |
|---|---|
| Import Dependency | Bilateral pacts (Australia, Argentina, Chile) |
| Weak Recycling | Formalize e-waste recycling (20% import cut) |
| ESG Conflicts | Tribal benefit-sharing; sustainable mining frameworks |
| Geopolitical Risks | Join Minerals Security Partnership (MSP); leverage Quad/G20 |
Global Best Practices
- Australia: "Critical Minerals Facilitation Office" for R&D funding.
- EU: Mandates 15% recycled content in batteries by 2030.
- US: Defense Production Act to stockpile REEs.
Key Data Points
- 2030 Demand Projection: Lithium ↑ 1,200%, REEs ↑ 450% (NITI Aayog).
- Recycling Potential: Can cut lithium imports by 20% (NCMM, 2025).
- Employment: 2M+ jobs in mineral processing by 2035.
Quote for Mains:
"In the race for critical minerals, India must transform from a passive buyer to an active player – blending diplomacy, innovation, and sustainability."
Potential Question:
"Critical minerals are the bedrock of India’s green and digital future. Examine the challenges in securing their supply and suggest strategies for resilience."