Context:

• Critical minerals are becoming the geoeconomic backbone of the 21st century, powering clean energy transitions, digital technologies, and national security systems.
• For India, dependence on imports and limited domestic capacity threaten future industrial, technological, and strategic autonomy.

Critical Minerals - A New Geostrategic Axis:

• Why critical minerals matter:
  • Critical minerals are metallic or non-metallic elements that are essential for clean energy systems, EVs, semiconductors, and strategic technologies, and whose supply chains are at risk of disruption.
  • Their demand is driven by energy transition, digitalisation, and supply chain resilience.
  • Examples include minerals of high importance like lithium, cobalt, nickel, graphite, and rare earth elements (REEs).
• Geopolitical concerns:
  • High geographical concentration and opaque supply chains.
  • For example, China controls 90% of REE refining, 70% of cobalt processing, and 60% of lithium conversion.
  • China’s lead stems from decades of policy coherence and industrial planning.

India’s Critical Mineral Strategy:

• National Policy initiatives:
  • 2022: Identification of 30 critical minerals by the Ministry of Mines.
  • 2025: Launch of National Critical Mineral Mission (NCMM) to secure supply chains.
• Current challenges:
  • 100% import dependence on key minerals like lithium, cobalt, and REEs.
  • Domestic exploration is growing, for example, 195 exploration projects in the past year, and 227 approved for the upcoming year.

Auctions and Exploration - Progress and Bottlenecks:

• Mines and Minerals (Development and Regulation) Act:
  • Inclusion of critical minerals enabled four rounds of auctions, fifth concluded in Jan 2025.
  • However, low bidder turnout due to high capital costs, inadequate processing capacity, and technical expertise gaps needs to be addressed.
• Midstream vulnerability:
  • India lacks refining and processing capacity for battery-grade materials.
  • Continued foreign dependence, especially on China, looms large.

Building Industrial Capability - Proposed Solutions:

• Establish mineral processing zones.
• Offer Production-Linked Incentives (PLI) for refining, separation, and conversion industries.
• Catalyse private investment in midstream processing.

Ensuring Mineral Security Amid Geopolitical Risks:

• External disruptions: China’s export curbs on REEs impact India's automotive sector, including EV production.
• Strategic recommendations:
  • Accelerate independent supply chain development.
  • Deepen bilateral partnerships, for example, ongoing collaboration with Australia, Argentina, shows a path forward.
  • Engage through Quad, G20, and Minerals Security Partnership (MSP).

Sustainability, Recycling, and ESG Compliance:

• Circular economy approach:
  • Recycling of batteries and electronics to reduce import dependency.
  • Challenges: Informal recycling sector, lack of formal infrastructure, need for high-efficiency recovery systems, etc.
• Sustainable mining and environmental, social and governance (ESG):
  • Many reserves are in tribal/ecologically sensitive zones.
  • Delays due to protests, legal hurdles, and ESG concerns.
  • Must adopt ESG frameworks, community participation, and local benefit-sharing models.

Way Forward - Policy and Strategic Alignment:

• Conduct regular assessments of critical mineral demand and supply.
• Update mineral lists as per evolving industrial and strategic priorities.
• Develop critical mineral stockpiles to buffer against supply shocks.
• Align mineral policy with foreign policy, energy policy, and industrial strategy.

Conclusion - India’s Strategic Imperative:

• India must act decisively to reduce dependency, foster self-reliance, and build resilient and sustainable supply chains.
• With the right policy execution, institutional backing, and international collaboration, India can emerge as a major global player in the critical mineral economy.