Context

• India’s growing engagement with the global clean-energy and high-technology economy has restored attention to an often-overlooked truth: mining alone does not create prosperity.
• The recently approved ₹7,280-crore rare-earth magnet scheme and the new G-20 framework on critical minerals reflect an acknowledgment that value creation lies not in extraction but in refining, processing, and manufacturing.
• As geopolitical tensions reshape supply chains, especially amid intensifying U.S.–China trade frictions, India’s reliance on foreign processing capacity has exposed deep vulnerabilities.

The Strategic Gap in India’s Critical Mineral Chain

• India has spent the past decade reforming its mining sector through amendments to the Mines and Minerals (Development and Regulation) Act.
• A study by the Council on Energy, Environment and Water (CEEW) finds that although India mines seven critical minerals important for clean energy and defence, copper, graphite, silicon, tin, titanium, rare earths, and zirconium, refining capacity for all of them remains inadequate.
• Domestic graphite purity levels fall short of battery requirements; rare earths are processed only into oxides rather than refined metals; and domestic tin supply meets a mere fraction of national demand.
• Without addressing these processing deficits, India risks undermining not only its energy transition but also its ambitions in sectors such as pharmaceuticals, automobiles, telecommunications, and semiconductors.

A Global Chokepoint Dominated by China

• China controls more than 90% of rare-earth and graphite refining, about 80% of cobalt processing, and around 70% of lithium chemical production.
• This dominance has periodically been used as geopolitical leverage, most notably when China imposed controls on rare-earth magnets, lithium-ion batteries, graphite anodes, and processing technologies in 2025.
• Although the restrictions were later eased, the episode exposed the fragility of global supply chains and highlighted the strategic significance of processing technologies.
• Other countries have responded swiftly. The U.S.–Japan and U.S.–Australia critical mineral partnerships directly tie financial incentives to domestic refining and processing capacity.
• These developments offer India a clear lesson: processing strength is now an essential component of economic security, industrial competitiveness, and geopolitical leverage.

Five Pathways to Building India’s Processing Capacity

• Transform Centres of Excellence into Hubs of Applied Innovation
  • India’s nine Centres of Excellence (CoEs) under the National Critical Mineral Mission must become engines of industrial innovation.
  • Rather than focusing solely on academic research, they must prioritise technologies that can reach commercial readiness quickly.
  • High-purity compounds, advanced refining methods, and efficiency-enhancing processes should be core priorities.
  • Collaboration between IITs, NITs, industry players, and think tanks is essential to accelerate the path from laboratory research to market deployment.
• Recover Minerals from Secondary Resources
  • India generates vast quantities of mineral-rich industrial by-products, coal fly ash, red mud, zinc residues, and steel slag.
  • These waste streams hold significant quantities of rare earths, gallium, cobalt, and vanadium. Pilot projects have already demonstrated recovery potential, but scaling them requires policy support.
  • Embedding recovery units in proposed Critical Minerals Processing Parks and offering incentives for extracting minerals from waste could simultaneously enhance mineral security and reduce environmental burdens.
• Build a Skilled Workforce for Advanced Metallurgy
  • Critical mineral processing demands specialised hydrometallurgical and advanced refining expertise, not traditionally taught in India’s metallurgical programmes.
  • A national effort to train technicians, engineers, and researchers is necessary.
  • Leveraging the NCMM’s skilling allocation to develop new curricula, training academies, and apprenticeship programmes will help create a large, modern workforce capable of supporting processing hubs across mineral-rich states like Odisha, Gujarat, and Jharkhand.
• De-risk Private Investment Through Demand Assurance
  • Critical-mineral markets are notoriously volatile, discouraging long-term private investment.
  • To counter this, India could adopt mechanisms similar to U.S. price-guarantee models that ensure stable demand for domestic producers.
  • A national mineral stockpile that acts as a market-maker, buying during downturns and releasing during surges, would help stabilise prices.
  • Government procurement norms could also require strategic sectors to source a portion of their materials domestically, ensuring consistent demand for Indian refiners.
• Link Mineral Diplomacy with Domestic Processing Strength
  • India’s overseas acquisitions in Argentina, Zambia, and elsewhere are important, but raw ore access alone offers limited leverage.
  • True influence comes from processing expertise. By demonstrating reliable high-purity refining capabilities, India can shift from transactional buyer-seller arrangements to deeper co-investment partnerships.
  • Initiatives like the Australia-Canada-India Technology and Innovation Partnership indicate the potential of such alliances.
  • Including processing technologies in bilateral and multilateral trade dialogues, through G-20, BRICS, and IPEF, can further solidify India’s role in global critical-minerals governance. 

Conclusion

• China’s recent restrictions make a compelling argument: control over processing equates to control over technology, industry, and power.
• For India, the question is no longer whether it possesses adequate mineral reserves but whether it can convert those minerals into high-purity materials essential for modern technologies.
• If India can bridge its processing gaps, the country will not only secure its clean-energy transition but also build resilient industrial supply chains across defence, electronics, automotive manufacturing, and pharmaceuticals.