Why in News?

A Production Linked Incentive (PLI) scheme to encourage the recycling of critical minerals in India is being designed by the Ministry of Mines. It is intended to complement the Battery Waste Management Rules (BWMR) 2022 and is in line with NITI Aayog policy recommendations.

What’s in Today’s Article?

• What are Critical Minerals?
• Measures Initiated by the GoI to Attain Self-reliance in Critical Minerals
• Recycling of Critical Minerals in India
• Proposed PLI Scheme to Boost the Recycling of Critical Minerals in India

What are Critical Minerals?

• A mineral is critical when the risk of supply shortage and associated impact on the economy is (relatively) higher than other raw materials.
• These minerals are essential for economic development and national security, and their lack of availability/ the concentration of extraction/ processing in a few geographical locations could potentially lead to supply chain vulnerabilities.
• These minerals (such as lithium, graphite, cobalt, titanium, and rare earth elements) are essential for the advancement of many sectors, including high-tech electronics, telecommunications, transport, and defence.
• It forms part of multiple strategic value chains, including -
  • Clean technologies initiatives such as zero-emission vehicles, wind turbines, solar panels;
  • Information and communication technologies, including semiconductors; and
  • Advanced manufacturing inputs and materials such as defence applications, permanent magnets, ceramics.
• Though India has not been a dominant player in the global supply chain for various critical minerals, it has been working to strengthen its position in the mining and processing of critical minerals.
• The Ministry of Mines has actively engaged with resource-rich countries for access to critical minerals as well as domestic exploration and auction of critical mineral blocks.

Measures Initiated by the GoI to Attain Self-reliance in Critical Minerals:

• Geological Survey of India (GSI): An attached office of the Ministry of Mines, the GSI has recently carried out mineral exploration in Salal-Haimna areas (Reasi district, J&K), and estimated 5.9 million tonnes of lithium ore.
• Khanij Bidesh India Ltd (KABIL): A joint venture company namely KABIL is mandated to identify and acquire overseas mineral assets of critical and strategic nature (lithium, cobalt) to ensure supply side assurance.
• Mineral Security Partnership (MSP): India has recently been inducted into the MSP, a US-led collaboration of 14 countries that aims to catalyse public and private investment in critical mineral supply chains globally.
• The Mines and Minerals (Development and Regulation) [MMDR] Act:
  • The MMDR Act 1957 was amended in 2023, empowering the central government to exclusively auction mining lease and composite licence for 24 critical minerals.
  • The objective of this amendment is to increase exploration and mining of critical minerals and ensure self-sufficiency in supply of critical minerals.

Recycling of Critical Minerals in India:

• Opportunity for India:
  • India is currently the third-biggest contributor to e-waste, with 3.3 million tonnes produced in 2019, compared to 53.6 million tonnes globally.
  • E-waste contains many reusable materials, including base metals, precious metals, and rare earth elements.
  • Hence, there will be a large scope for critical minerals’ recovery from discarded e-waste in the coming few years.
  • China, for example, has succeeded in producing more cobalt by recycling than by mining.
• Advantages of recycling critical minerals:
  • Promoting the recycling of e-waste would provide an opportunity to stabilise the market with assured domestic supplies of critical raw materials (CRMs).
  • It will conserve energy and the environment by reducing requirements from mines.
  • Recycled metals can be 2 to 10 times more energy-efficient than metals smelted from virgin ore.
• Challenges for India:
  • India’s e-waste generation is poised to surge, driven by rapid growth in solar and wind energy infrastructure and EV adoption.
  • However, recycling rates in India are currently low, with some lead, copper and nickel success.
  • Much of the e-waste management in India is done by the informal sector, including collection, segregation, dismantling, and recycling.
• Steps taken by India:
  • The BWMR 2022 requires the recycling of used EV lithium-ion batteries in a phased manner starting in 2026.
  • These rules mandate that producers of batteries containing lithium, nickel, cobalt, and lead ensure environmentally sound management of waste batteries through Extended Producer Responsibility (EPR) compliance.

Proposed PLI Scheme to Boost the Recycling of Critical Minerals in India:

• Background: In a report released in 2023, NITI Aayog recommended for a PLI scheme for critical mineral recycling in line with the Advanced Chemistry Cell (ACC) PLI scheme given to cell manufacturers.
• About the scheme:
  • The PLI scheme will target e-waste recycling (often referred to as “urban mining”) to recover critical minerals such as lithium, copper, cobalt, graphite, chromium, and silicon.
  • It will incentivise production of recycled critical minerals for secondary use and promote investment in advanced recycling technologies and infrastructure.
  • The quantum of incentive is likely to vary based on the type and value of minerals recycled.
• Objective: This move aims to foster a circular economy and bolster domestic supply chains, following a weak response to recent auctions of critical mineral blocks.