Critical Minerals

Table of Contents

Context: An expert committee set up by the Centre has identified 30 minerals as critical to India, which are largely used in the manufacturing of batteries.

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The panel has identified several critical minerals including Antimony, Beryllium, Cadmium, Cobalt, Copper, Indium, Nickel, Platinum, Palladium, Silicon, and Strontium. These minerals are essential for various sectors such as energy, defence, agriculture, pharmaceuticals, and telecommunications.
The panel recommends the establishment of a national institute or a Center of Excellence for Critical Minerals, similar to Australia’s CSIRO.
- The CECM would focus on discovering new deposits of critical minerals using geological knowledge, data analytics, modeling, and machine learning capabilities.
- It would also support the development of research and analytical infrastructure to meet India’s demand for critical minerals.
- It would work in coordination with the Ministry of Commerce and Industries and the Ministry of External Affairs to monitor export management of critical minerals.
- This step ensures that India optimizes its use of critical minerals while maintaining an appropriate balance between domestic demand and exports.
- India aims to reduce its dependence on imports for critical minerals, as a significant portion of the supply currently comes from China. By decreasing import reliance, India seeks to secure a stable and sustainable supply of these minerals.
The Ministry of Mines will also revisit and update the list of critical minerals periodically.

Understanding Critical Minerals

What are Critical Minerals?

Critical minerals are mineral resources, both primary and processed, that are essential inputs in modern technologies, economies, and national security.
They are characterized by the risk of supply chain disruption due to non-availability and price volatility.
These minerals play a crucial role in various industries and sectors and have limited substitutes, making them of strategic importance.

Elements included:

It includes metallic and non-metallic element such as Antimony, Beryllium, Cobalt, Germanium, Graphite, Indium, Lithium, Niobium, 17 Rare earths (heavy and light), Rhenium, Tantalum, Silicon, Strontium, Vanadium, Zirconium etc.

Significance:

They are critical as their associated impact on the economy is relatively higher than the other raw materials and they have limited substitutes.

Challenges that India faces wrt Critical Minerals

India faces several challenges regarding critical minerals:

Reliance on China: China is a dominant player in the global supply chains of critical minerals. India heavily relies on imports of these minerals from China, making its supply chain vulnerable to disruptions, such as those caused by the Covid-19 pandemic and associated lockdowns.
Geopolitical Conflicts: The ongoing war between Russia and Ukraine has implications for critical mineral supply chains. Russia is a significant producer of minerals like nickel, palladium, titanium, and rare earth elements, while Ukraine has reserves of minerals like lithium, cobalt, graphite, and rare earth elements. Geopolitical conflicts in these regions can impact the availability and stability of critical mineral supplies.
Strategic Partnerships: The strategic partnership between China and Russia in critical mineral supply chains can affect the balance of power and have implications for other countries, including India. This can potentially impact the availability and accessibility of critical minerals for India’s domestic needs.
Growing Demand for Renewable Energy and Electric Vehicles: The transition to renewable energy technologies and electric vehicles requires increasing quantities of critical minerals like copper, lithium, cobalt, rare earth elements, and others. India may face challenges in meeting its domestic demand for these minerals, as it either lacks sufficient reserves or its requirements exceed the available supply.
Global Initiatives: Developed countries have formed partnerships and alliances, such as the Minerals Security Partnership and G7’s Sustainable Critical Minerals Alliance, to address critical mineral supply chain challenges. However, India not finding a place in the US-led Minerals Security Partnership (MSP) is a major concern which may pose challenges for ensuring a resilient supply chain.

About Minerals Security Partnership (MSP)

It is an ambitious US-led partnership of 11 countries to secure and strengthen supply chains of critical minerals such as Cobalt, Nickel, Lithium, and other rare earth minerals.
Members include US, Australia, Canada, Finland, France, Germany, Japan, Republic of Korea, Sweden, United Kingdom, and the European Commission.
The alliance is aimed at catalysing investment from governments and the private sector to ensure that countries realise the full economic development benefit of their geological endowments.
It comes in the backdrop of recorded demand for critical minerals and dominance of China in supply chain of these minerals particularly the processing stage of production.
The Democratic Republic of the Congo (DRC) and People’s Republic of China (China) were responsible for approximately 70% and 60% of global production of cobalt and rare earth elements respectively in 2019.

Exclusion from MSP and India’s Concern

The exclusion of India from the Minerals Security Partnership (MSP) is a cause for concern due to the following reasons:

Self-reliance and Domestic Manufacturing:
- India’s goal of achieving self-reliance (AtmaNirbhar Bharat) in multiple sectors, such as semiconductors, batteries, and advanced technologies, requires a robust domestic manufacturing capacity.
- Being excluded from MSP can hinder access to critical minerals needed for domestic production, potentially impeding India’s progress towards self-reliance.
Energy Efficiency and Transition to Low-Emission Technologies:
- Critical minerals play a vital role in promoting energy efficiency through advanced electricity networks, energy-efficient lighting, and battery storage systems.
- Additionally, for the faster adoption of hybrid and electric vehicles and the decarbonization of the energy system through clean energy technologies, India requires significant quantities of critical minerals. Exclusion from MSP may limit access to these minerals, hindering the transition to low-emission technologies.
Digital Economy Transition:
- Critical minerals are essential for India’s digital economy transition.
- Semiconductors, batteries, and other advanced technologies crucial for this transition heavily rely on these minerals.
- Exclusion from MSP may result in limited availability or increased prices of critical minerals, posing challenges to India’s digital economy plans.
Global Collaboration and Partnerships:
- MSP serves as a platform for global collaboration and strategic partnerships in addressing critical mineral supply chain challenges.
- Exclusion from MSP means India may miss out on important opportunities to engage with other countries, share knowledge, and collectively work towards ensuring a resilient and sustainable supply of critical minerals.

Way Forward

Comprehensive strategy: India requires a critical minerals strategy comprising measures aimed at making the country Aatmanirbhar (self-reliant) in critical minerals needed for sustainable economic growth and green technologies for climate action, national defence, and affirmative action for protecting the interests of the affected communities and regions.
Partnerships: India must actively engage in bilateral and plurilateral arrangements for building assured and resilient critical mineral supply chains.
Regular Updation of List: The assessment of critical minerals for India needs to be updated every three years to keep pace with changing domestic and global scenarios.