Critical Minerals

India’s first auction of deep-sea blocks for the extraction of critical minerals has been delayed indefinitely after receiving a poor response from bidders. This auction was expected to be a significant step toward India’s goal of self-reliance in critical minerals, essential for technologies like electric vehicles (EVs), defence equipment, and renewable energy.

About Critical Minerals

Critical minerals are defined as minerals that are indispensable for modern technologies and national security but have potential supply chain risks due to limited availability or geographical concentration. The importance of these minerals grows over time, influenced by technological demand and geopolitical dynamics.

Applications of Critical Minerals:

• Electric vehicles: Lithium, Cobalt, Nickel, Graphite, etc., are essential for rechargeable batteries.

• Defence and Aerospace: Many critical minerals are used in defence equipment, aircraft, and missile technology.

• Renewable Energy: Minerals like Cobalt, Graphite, Lithium, and Rare Earth Elements (REEs) are vital for solar panels, wind turbines, and energy storage technologies.

• Electronics and Other Products: Cobalt, Copper, Tin, and Silicon are used in the production of electronics, mobile phones, computers, fiber-optic cables, and semiconductors.

Top Global Producers:

Countries such as Chile, Indonesia, Congo, China, Australia, and South Africa dominate the production of critical minerals globally. Many of these countries have a near-monopoly over the extraction and supply of certain critical minerals, raising concerns for countries reliant on imports.

India’s List of Critical Minerals

In 2023, the Ministry of Mines released a list of 30 critical minerals for India. These minerals are essential for meeting the country’s technological, industrial, and defense needs. Some of the notable minerals include:

• Lithium: Essential for batteries used in electric vehicles and renewable energy storage.

• Cobalt: A key component of rechargeable batteries and electronics.

• Graphite: Used in batteries, steel production, and other industrial applications.

• Nickel: Crucial for battery production and stainless steel.

• Rare Earth Elements (REEs): Key to many high-tech and defense applications.

Factors Impacting the Criticality of Minerals

The criticality of minerals is primarily determined by two key parameters:

1. Economic Importance:

   • This factor assesses how minerals are used across various industrial sectors and the potential consequences if a mineral becomes unavailable. It evaluates how critical the mineral is for sectors like electronics, energy, defense, and manufacturing.

   • For example, minerals like lithium are essential for electric vehicle batteries, and any disruption in its supply can significantly affect the electric vehicle market and renewable energy transition.

2. Supply Risk:

   • This factor examines the concentration of global production in certain countries and the risks associated with that concentration. Countries that have a monopoly over certain minerals can impact global supply due to geopolitical tensions, trade restrictions, or environmental practices.

   • For instance, rare earth elements (REEs) are primarily produced by China, making the global supply susceptible to any trade or political disputes with China.

Five Pillars of the Critical Minerals Value Chain

To effectively manage and ensure a steady supply of critical minerals, the entire value chain must be strengthened. These five pillars represent the key stages in the mineral lifecycle:

1. Geoscience and Exploration:

   • Geological mapping by agencies like the Geological Survey of India (GSI) helps identify mineral-rich areas (e.g., gold, base metals, rare earth elements). This stage is crucial for discovering new reserves.

   • In India, private sector participation has been encouraged to enhance exploration, and the National Mineral Exploration Trust (NMET) supports these efforts.

2. Mineral Extraction:

   • Minerals are extracted through surface mining or underground mining. The choice of mining method depends on the mineral and geological conditions.

   • The extraction process typically involves heavy machinery for drilling, blasting, and hauling minerals.

3. Intermediate Processing:

   • This involves refining raw minerals to prepare them for use in manufacturing.

   • India faces challenges in metal refining infrastructure, and advanced refining technologies like vapor metallurgy are critical to reducing the environmental impact and improving efficiency.

4. Advanced Manufacturing:

   • Once minerals are processed into metals, they are used in various sectors, including electronics, renewable energy (e.g., solar panels, EVs), and aerospace.

   • Minerals like rare earth elements are essential for permanent magnets used in electric vehicles and wind turbines, while cobalt and nickel are vital for batteries.

5. Recycling:

   • With the transition to a greener future, recycling of critical minerals will become more crucial.

   • By 2040, the International Energy Agency (IEA) projects a significant rise in recycled mineral volumes, especially for metals like cobalt, lithium, and nickel.

   • Robust recycling infrastructure and secondary markets will be needed to recover minerals from post-consumer goods and mining/industrial waste.

Initiatives Taken for Critical Minerals in India

Several initiatives have been undertaken in India to secure critical mineral resources:

1. Planning Commission (NITI Aayog):

   • A 2011 report highlighted the need for ensuring the availability of critical minerals to support industrial growth.

   • 12 strategic minerals, such as tin, lithium, and gallium, were identified as crucial.

2. Ministry of Mines:

   • A steering committee was formed in 2011 to assess the availability of rare-earth elements (REEs) and other energy-critical minerals.

   • This led to the preparation of a roadmap for ensuring resource security in the country.

3. Council on Energy, Environment and Water (CEEW):

   • In a 2023 study, CEEW identified 13 minerals critical for India by 2030, including graphite, germanium, and rare earth elements.

4. Geological Survey of India (GSI):

   • Strategic plans have been prepared to enhance the exploration of rare earth elements (REEs) and other critical minerals.

   • GSI has focused on rare earth reserves and exploration in beach sands and atomic minerals.

5. Centre for Socio-Economic Progress (CSEP):

   • CSEP evaluated the criticality of 43 non-fuel minerals in India, based on their economic importance and supply risks.

Mandate of the New Committee on Critical Minerals

The Ministry of Mines recently constituted a committee to identify critical and strategic minerals. Chaired by Dr. Veena Kumari Dermal, the committee's key findings include:

1. Critical Mineral Identification:

   • The categorization of minerals depends on various factors such as availability, monopoly on resources, substitutability, use in frontier technologies, and recycling potential.

2. Assessment Process:

   • Stage 1: The committee studied critical mineral strategies of countries like Australia, USA, and China.

   • Stage 2: Consultations were held with ministries such as Power, New and Renewable Energy, and Atomic Energy.

   • Stage 3: A detailed statistical analysis was conducted to assess factors like import reliance and substitutability.

3. Critical Minerals for India:

   • Based on the assessment, 30 minerals were identified as most critical, including fertilizer minerals such as phosphorus and potash.

Applications and Availability of Critical Minerals in India

These minerals are now part of Part D of Schedule I of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), allowing the Central Government exclusive authority to auction these minerals.

National Critical Mineral Mission (NCMM)

To strengthen India’s critical mineral sector and reduce reliance on imports, the Government of India launched the National Critical Mineral Mission (NCMM) in 2025. The mission aims to establish a comprehensive framework for the sustainable and self-reliant production of critical minerals within India.

Objectives of NCMM:

1. Exploration:

   • The Geological Survey of India (GSI) will conduct 1,200 exploration projects from 2024-25 to 2030-31 to explore and assess reserves of critical minerals such as graphite, lithium, and rare earth elements (REEs).

   • The mission aims to ensure domestic production of at least 15 critical minerals in the coming years.

2. Mining and Processing:

   • The NCMM seeks to promote the development of mining assets both within India and abroad. It targets Indian companies to acquire 50 mining assets globally.

   • The mission also aims to develop domestic processing capabilities to reduce dependency on foreign nations for mineral processing.

3. Recycling:

   • An incentive scheme for mineral recycling with a budget of INR 1,500 crore (USD 170 million) is part of the mission. The goal is to recover 400 kilotonnes (kt) of critical minerals from end-of-life products.

4. Stockpiling:

   • A National Critical Minerals Stockpile will be created to ensure security of supply and mitigate the risks from global supply chain disruptions.

5. Research and Innovation:

   • The mission also seeks to boost research in critical mineral technologies, with a target to generate 1,000 patents and ensure self-sufficiency in processing at least 5 critical minerals by 2031.

6. Governance:

   • The NCMM will be governed by an Empowered Committee on Critical Minerals, which will be responsible for coordinating and implementing initiatives under the mission.

Challenges and Delays in Auction of Deep-Sea Blocks

The auction of deep-sea blocks for extracting critical minerals has faced setbacks. The poor response from bidders highlights the challenges of deep-sea mining and the complexities of investing in offshore extraction.

• Technical Challenges: Deep-sea mining requires highly specialized technology and expertise, which may not be readily available.

• Environmental Concerns: There are growing concerns over the environmental impact of deep-sea mining, particularly on marine ecosystems and biodiversity.

• Economic Viability: Given the high upfront costs involved, many bidders may be hesitant without clear financial returns or government support.

Looking Ahead

India’s push for self-reliance in critical minerals is an essential part of its strategy to support electric vehicles (EVs), renewable energy, and defense infrastructure. However, the delayed auction of deep-sea blocks underscores the difficulties in securing a stable and sustainable supply of these essential resources.