Critical Minerals Critical

The world is witnessing rapid technological advancement, which, while propelling growth and prosperity, is bringing to the forefront the importance of critical minerals, classified into energy minerals and rare earth elements. Nickel, lithium and cobalt have applications across various sectors, such as renewable energy, electric mobility, consumer electronics and high-end industrial applications. Consequently, their demand will rise rapidly, underscoring the need for a reliable and resilient supply chain.

Moreover, India aims to be a manufacturing powerhouse and is committed to achieving net zero, implying a shift to clean energy. Thus, to unlock the nation’s full potential, it is imperative to formulate a national resourcing strategy for critical minerals.

GoI has undertaken several initiatives, including adopting the National Mineral Policy in 2019. Moreover, Khanij Bidesh India Ltd (KABIL), has been set up to ensure a stable supply of critical and strategic minerals for the domestic market. However, more needs to be done. The Ministry of Mines and Minerals (Development and Regulation) Amendment Act 2015, to review and include minerals which have been kept out of its purview. In addition, junior miners should be incentivised to take up exploration, and the in-house mining capability of domestic companies must be harnessed. A staged approach via minerals and investments in end-to-end value chain will increase the nation’s manufacturing output, creating job opportunities and capturing demographic dividend.

The challenge is that the supply of critical minerals is limited. With demand expected to increase exponentially because of a greater global emphasis on renewable energy, the country needs a concrete strategy. This is more so because the global supply chain of these minerals is concentrated in certain regions and unevenly distributed. Nations blessed with such resources are looking to take control to meet their needs and that of friendly countries.

While several critical minerals are found in India’s soil of natural resources, there must be a concerted effort on exploration to determine the exact availability of each, besides scouting for other strategic minerals. On the policy front, the government must fund research projects that develop recycling, reusing and repurposing strategies, and breakthroughs in technology for mineral exploration and processing must be pursued as many critical minerals are deep-seated or located offshore and often require complex processing.

Therefore, there is need for a comprehensive national resourcing strategy. The Ficci report on New Age Energy Minerals, released in June, has compiled geographical and geological information, details of the value chain, including end-use sectors and applications, market outlook and long-term demand forecasts for critical minerals. It advocates prioritising exploration and leveraging India’s mining expertise and strategic ties to locate and access critical minerals.

India, Australia and Japan entered the Resilient Supply Chain Initiative (SCRI) in 2020 to attain sustainable, balanced and inclusive growth in the Indo-Pacific region. This and the US, forming the Quad, recently set up a working group for critical materials and technologies. This year, India and Australia committed to working in concert towards investment in critical minerals, especially lithium and cobalt, and developing supply chains both within and beyond their countries. This move came after a year of signing the India-Australia Critical Minerals Investment Partnership.

It must be understood that control of the entire mineral value chain is not feasible. India should play to its strengths and capitalise on opportunities. The country is well-positioned to participate in diverse global value chains and contribute to mining, processing and manufacturing. However, we must enhance our domestic research and development and emerge as a market leader in mineral-related technology. Fostering the development of a mineral ecosystem is necessary to achieve the nation’s economic and environmental objectives.

Given this backdrop, a national resource strategy focusing on critical minerals is the need of the hour. India must actively participate in global value chains to contain and safeguard its supply chains. Acting quickly and decisively will boost the nation’s growth trajectory and lead to Atmanirbhar Bharat.