Critical Minerals

Indian companies are actively exploring mining opportunities for critical minerals in neighbouring countries to reduce reliance on China and some other strategic places, which dominate global supply chains. China currently produces three-fifths of rare earth minerals, crucial for clean energy and electronics. India, heavily reliant on imports for critical minerals, faces challenges due to China's dominance. In 2020, India imported 100% of its lithium, cobalt, nickel, and vanadium requirements, among others. This heavy dependency underscores the urgency for India to diversify its sources and bolster domestic production to ensure a stable supply of critical minerals essential for economic growth and the transition to green technologies.

Indian companies, including Ola Electric and Hindalco, are looking into graphite mining opportunities in Sri Lanka, aiming to secure critical mineral supplies for lithium-ion batteries. The Ministry of Mines hosted meetings with industry stakeholders in January 2024 to discuss this expansion beyond South America. Sri Lanka's significant reserves of vein graphite, a crucial component in lithium-ion batteries, make it an attractive prospect for Indian firms. Meanwhile, in Australia, companies like Vedanta, Tata Steel, and Adani Group are exploring mining opportunities to bolster India's critical minerals supply chain. This move aligns with the ministry's efforts to strengthen India's access to overseas mineral assets.

Critical Minerals: A mineral earns the label "critical" when the risk of supply shortage and its potential impact on the economy outweigh those of other raw materials. This risk assessment typically considers factors like import dependence, recycling potential, and substitutability. Additionally, challenges in extraction and associated social and environmental impacts can further amplify the supply risk. This definition, adopted by the US and the EU, emphasises both supply risk and economic importance. Australia similarly defines critical minerals as those vital for global economic well-being but susceptible to scarcity due to geological, geopolitical, or trade-related issues. In essence, critical minerals are indispensable for economic growth and national security. Their scarcity or concentration in specific regions poses a significant risk to supply chains, potentially leading to disruptions and vulnerabilities.

Enlisting Critical Minerals: Different countries have their own lists of critical minerals based on their specific circumstances and priorities. The US, Japan, the UK, the EU, and Canada have identified their critical minerals. For instance, the US has declared 50 minerals as critical, while Japan has identified 31 and the UK 18.

Process of Identifying Critical Minerals in India: The Ministry of Mines in India formed a committee to identify critical minerals for the country. The committee undertook a three-stage assessment process:

1. Studying Global Strategies: Analysing critical minerals strategies of major economies such as Australia, the US, Canada, the UK, Japan, and South Korea. They considered 69 elements/minerals.
2. Inter-ministerial Consultation: Consulted various ministries to identify minerals critical for their respective sectors.
3. Empirical Formula: Developed a formula, considering parameters like economic importance, supply risk, disruption potential, substitutability, cross-cutting usages, import reliance, and recycling rates.

Why India Needs a Critical Mineral List: India's critical mineral list prioritises efforts and resources to ensure an uninterrupted supply chain. Despite possessing the world’s fifth-largest reserve of rare earth minerals (In the coastal beach placer sands in parts of Kerala, Tamil Nadu, Odisha, Andhra Pradesh, Maharashtra and Gujarat and in the inland placers in parts of Jharkhand, West Bengal and Tamil Nadu), India heavily relies on imports for many minerals. Establishing a critical mineral list helps mitigate supply chain disruptions, advance self-reliance efforts, provide a framework for policy formulation, and promote cleaner technologies. India's push for domestic manufacturing, renewable energy adoption, and clean technology development necessitates a strategic approach to critical minerals.

List of 30 Critical Minerals Identified by India: Based on the assessment process, the committee identified 30 critical minerals:

1. Antimony: Used in flame retardants, batteries, plastics, glass, and ceramics.
2. Beryllium: Utilised in automotive components, machinery manufacturing, and electronics.
3. Bismuth: Found in chemicals, pharmaceuticals, and casting of iron.
4. Cadmium: Essential for batteries, pigments, and coatings.
5. Cobalt: Vital for electric vehicles, batteries, alloys, aerospace, and pigments.
6. Copper: Essential in electrical products, wiring, solar panels, and automotive industry.
7. Gallium: Used in semiconductors, integrated circuits, and LEDs.
8. Germanium: Found in optical fibres, satellites, and solar cells.
9. Graphite: Essential for batteries, lubricants, and fuel cells.
10. Hafnium: Utilised in superalloys, semiconductors, and catalysts.
11. Indium: Found in electronics and semiconductors.
12. Lithium: Vital for electric vehicles, batteries, and ceramics.
13. Molybdenum: Used in steel alloys, catalysts, and electronics.
14. Niobium: Found in construction and transportation.
15. Nickel: Essential for stainless steel, batteries, aerospace, and defence.
16. Platinum Group Elements (PGE): Used in auto catalysts, jewellery, and electronic equipment.
17. Phosphorus: Essential in mineral fertiliser.
18. Potash: Found in chemical fertilisers and water softeners.
19. Rare Earth Elements (REE): Used in magnets, batteries, electronics, and defence technologies.
20. Rhenium: Utilised in superalloys, aerospace, and catalysts.
21. Selenium: Found in electrolytic manganese, glass, and pigments.
22. Silicon: Essential in semiconductors, electronics, and alloys.
23. Strontium: Used in alloys, pigments, glass, and magnets.
24. Tantalum: Vital for capacitors, superalloys, and medical technology.
25. Tellurium: Utilised in solar power and thermoelectric devices.
26. Tin: Found in aerospace, construction, electronics, and telecommunications.
27. Titanium: Essential for aerospace, defence, and chemical applications.
28. Tungsten: Used in tools, catalysts, aeronautics, and energy.
29. Vanadium: Found in alloys and batteries.
30. Zircon: Utilised in high-value chemical manufacturing and electronics sectors.

Recommendation for the Establishment of Centre of Excellence: The committee recommends the establishment of a Centre of Excellence for Critical Minerals (CECM) within the Ministry of Mines. This centre will update the list of critical minerals periodically, develop strategies, and execute functions to foster the development of an effective value chain for critical minerals in the country.

Importance of Critical Minerals in Modern Technology: Critical minerals play a vital role in modern technology, powering various industries such as electronics, aerospace engineering, and space technology. For instance:

• Electronics: Critical minerals like lithium, cobalt, and rare earth elements are essential for manufacturing electronic devices such as smartphones, laptops, and tablets.
• Aerospace Engineering: Minerals like titanium and nickel are crucial in aerospace engineering for building aircraft components, engines, and structural materials.
• Space Technology: Certain critical minerals like gallium, indium, and germanium are indispensable in space technology for producing semiconductors, solar panels, and other high-tech equipment used in space exploration.

• Lithium: Used in rechargeable batteries for electronics and electric vehicles. Largest reserves found in Chile, Australia, and Argentina.
• Cobalt: Key component in lithium-ion batteries. Major reserves located in the Democratic Republic of Congo (almost 70%), Australia, and Russia.
• Rare Earth Elements (REE): Essential for electronics, magnets, and renewable energy technologies. China dominates the production of rare earth elements.
• Titanium: Used in aerospace and defence industries. Major reserves found in Australia, South Africa, and Canada.
• Nickel: Crucial for stainless steel production and battery manufacturing. Main reserves located in Indonesia, the Philippines, and Russia.
• Graphite: Essential for lithium-ion batteries and other high-tech applications. Major reserves found in China, Brazil, and Canada.
• Gallium, Indium, Germanium: Used in semiconductors and electronics. Gallium is mainly sourced from China, while indium and germanium reserves are found in China, Peru, and Canada.

For instance:

• Lithium: 100% import dependent; major sources include Chile, Russia, and China.
• Cobalt: 100% import dependent; major sources include China, Belgium, and the Netherlands.
• Nickel: 100% import dependent; major sources include Sweden, China, and Indonesia.
• Vanadium: 100% import dependent; major sources include Kuwait, Germany, and South Africa.
• Niobium: 100% import dependent; major sources include Brazil, Australia, and Canada.
• Germanium: 100% import dependent; major sources include China, South Africa, and Australia.
• Rhenium: 100% import dependent; major sources include Russia, the UK, and China.
• Beryllium: 100% import dependent; major sources include Russia, the UK, and China.
• Tantalum: 100% import dependent; major sources include Australia, Indonesia, and South Africa.
• Strontium: 100% import dependent; major sources include China, the US, and Russia.
• Zirconium (zircon): 80% import dependent; major sources include Australia, Indonesia, and South Africa.
• Graphite (natural): 60% import dependent; major sources include China, Madagascar, and Mozambique.
• Manganese: 50% import dependent; major sources include South Africa, Gabon, and Australia.
• Chromium: 2.5% import dependent; major sources include South Africa, Mozambique, and Oman.
• Silicon: Less than 1% import dependent; major sources include China, Malaysia, and Norway.

• Economic Development:
  • High-tech industries like electronics, telecommunications, transport, and defence, from where India’s future prosperity depends, heavily rely on critical minerals.
  • These minerals are essential for green technologies such as solar panels, wind turbines, batteries, and electric vehicles.
• National Security: These minerals are vital for strategic sectors like defence, aerospace, nuclear, and space applications.
• Environmental Sustainability: Critical minerals play a key role in transitioning towards clean energy and a low-carbon economy. With India's commitment to achieve a net-zero emitter of greenhouse gases (GHG) by 2070, these minerals are essential for meeting green objectives and reducing reliance on fossil fuels.
• China Threat:
  • China poses a significant threat due to its dominant position in the critical minerals sector. As the world's largest producer of 16 crucial minerals, including cobalt and rare earth elements, China exercises considerable influence.
  • Moreover, the country maintains a monopoly in processing operations, controlling approximately 35% of nickel refining, 50-70% of lithium and cobalt refining, and nearly 90% of rare earth element refining.
  • China's control extends to offshore mines as well, notably cobalt mines in the Democratic Republic of Congo, which supply 70% of the world's cobalt.
  • This extensive control over production, processing, and offshore mining operations raises concerns about potential supply disruptions in critical minerals, especially in the event of geopolitical conflicts.

• China's Dominance: Three-fifths of rare earth minerals (60%), crucial for clean energy and electronics, are mined in China. India faces shortages due to China's significant role in critical minerals supply chains, exacerbated by the lingering effects of COVID-19.
• Impact of Russia-Ukraine War: Disruption in the supply chains of minerals like nickel, palladium, and titanium sponge due to the conflict between Russia and Ukraine. Both countries are significant producers, leading to disruptions in critical mineral availability.
• Demand for Green Technologies: India's dependence on other countries for critical minerals hampers its efforts in adopting green technologies due to insufficient domestic supply.
• Geographic Challenges: Concentration of mining and processing activities in specific regions may hinder the availability of critical minerals globally.
• Trade Agreement Limitations: Lack of trade agreements with mineral-rich nations affects India's access to critical minerals.
• Private Sector Participation: Inadequate involvement of the private sector in critical mining industries contributes to supply chain challenges.
• Need for Advanced Technologies in Mineral Discovery: To build competitive value chains, India must utilise advanced technologies for the discovery and identification of mineral wealth. This approach will aid in planning for the acquisition and preservation of critical mineral assets, thereby reducing import dependency.

Securing a consistent supply of critical minerals has become a global priority, with various countries implementing measures to address supply chain vulnerabilities.

Global Efforts:

1. United States (US): The US has initiated a review of vulnerabilities in its critical minerals supply chains and is focusing on expanding domestic mining, production, processing, and recycling of critical minerals. This includes efforts to reduce reliance on imports and enhance domestic resilience.
2. Australia: Australia's Critical Minerals Facilitation Office (CMFO) collaborates with countries like India to ensure a reliable supply of critical minerals. Memorandums of Understanding (MoUs) have been signed to facilitate cooperation in this regard.
3. United Kingdom (UK): The UK has established the Critical Minerals Intelligence Centre to study future demand and supply of critical minerals. It aims to develop a comprehensive strategy to address critical mineral challenges.

India's Domestic and Global Initiatives:

1. Domestic Exploration: India's Geological Survey of India has conducted advanced mineral exploration, identifying inferred lithium resources in Jammu & Kashmir. Further exploration efforts are planned across the country.
2. Joint Venture Company: Khanij Bidesh India Ltd. (KABIL) has been established to acquire overseas mineral assets, ensuring a reliable supply of critical minerals like lithium, cobalt, and rare earth elements.
3. Mineral Security Partnership (MSP): India's inclusion in MSP, a collaboration of 14 countries, underscores its focus on securing critical mineral supply chains globally. This partnership aims to reduce dependency on China and ensure a stable supply of critical minerals for sustainable economic growth and green technologies.
4. Legislative Reforms: India has made several amendments to the Mines and Minerals (Development and Regulation) Act in recent years to promote domestic exploration and mining. These reforms aim to enhance India's self-reliance in critical minerals.
5. International Alliances: India is actively involved in international alliances such as the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) and the Clean Energy Ministerial (CEM). These forums facilitate collaboration on clean energy technologies and sustainable mining practices.
6. Samudrayan: India has launched its first manned ocean mission, named Samudrayan, in Chennai. This initiative puts India in the company of nations like the USA, Russia, Japan, France, and China, which possess similar underwater vehicles. The mission aims to explore deep ocean resources such as polymetallic manganese nodules, gas hydrates, hydrothermal sulphides, and cobalt crusts, found at depths ranging from 1000 to 5500 metres. Samudrayan has a depth capability of 6000 metres and features a Titanium Alloy Personnel Sphere, designed to accommodate three individuals for up to 12 hours, with emergency support extending up to 96 hours.

Khanij Bidesh India Ltd. (KABIL) was incorporated in August 2019 as a joint venture between three public sector undertakings: National Aluminium Company Limited (NALCO), Hindustan Copper Limited (HCL), and Mineral Exploration Corporation Limited (MECL). Each of these companies holds an equal equity stake in KABIL, thereby ensuring a collaborative approach to mineral resource acquisition.

• Mission and Objectives: The core mission of KABIL is to secure access to strategically important mineral assets located abroad. This is aimed at reducing India's dependency on imported minerals, particularly those critical for the country's economic growth, industrial development, and national security.
• Key Initiatives and Efforts:
  1. Overseas Mineral Acquisition: KABIL identifies and evaluates potential mineral assets located in foreign countries, with a focus on critical minerals such as lithium, cobalt, and rare earth elements. It negotiates agreements and partnerships with international mining companies and governments to acquire exploration and mining rights.
  2. Strategic Partnerships: KABIL collaborates with international stakeholders, including governments, mining companies, and financial institutions, to facilitate investments in overseas mineral projects. These partnerships aim to leverage India's technological expertise and financial resources to develop mineral resources sustainably.
  3. Risk Management: KABIL assesses geopolitical, operational, and financial risks associated with overseas mineral projects to ensure prudent investment decisions. It adopts strategies to mitigate risks and safeguard India's interests in the global mineral market.
  4. Supply Chain Optimization: KABIL works towards optimising the supply chain of critical minerals by ensuring a diversified and reliable procurement network. This includes exploring alternative sources, establishing long-term supply agreements, and promoting responsible sourcing practices.
  5. Technology Transfer and Innovation: KABIL promotes technology transfer and innovation in mineral exploration, extraction, and processing to enhance efficiency and sustainability. It collaborates with international partners to adopt best practices and cutting-edge technologies in the mineral sector.
  
  

  Mineral Security Partnership (MSP): The MSP was initiated by the United States in response to concerns over the concentration of critical mineral production and processing in a few countries, particularly China. It was officially launched in 2022 with the participation of 13 countries and the European Union (EU). Some of the key member countries include the United States, Australia, Canada, Japan, South Korea, and India.

  • Objectives and Focus Areas: The primary objectives of the MSP are:
    1. Enhancing Mineral Security: The partnership aims to enhance the mineral security of member countries by diversifying sources of critical minerals, improving supply chain resilience, and fostering cooperation in exploration, extraction, processing, and recycling activities.
    2. Promoting Sustainable Development: The MSP seeks to promote sustainable development practices in the mining and mineral processing sector, including environmental protection, social responsibility, and economic development in host countries.
    3. Addressing Geopolitical Risks: By fostering collaboration among member countries, the MSP aims to mitigate geopolitical risks associated with the concentration of critical mineral production in specific regions, thereby enhancing global stability and security.
  • Key Initiatives and Efforts:
    1. Investment in Critical Mineral Projects: The MSP supports high-impact critical mineral projects globally by providing financial assistance, technical expertise, and regulatory support. These projects focus on exploration, development, and production of critical minerals to ensure a stable and diversified supply.
    2. Technology and Innovation: The partnership promotes technology transfer and innovation in the mining and mineral processing sector to improve efficiency, reduce environmental impacts, and enhance resource recovery. It facilitates knowledge sharing and capacity building among member countries.
    3. Policy Coordination: The MSP facilitates policy coordination and information exchange among member countries to harmonise regulations, standards, and best practices related to critical mineral supply chains. This includes addressing trade barriers, investment regulations, and supply chain transparency.
    4. International Engagement: The partnership engages with other international organisations, such as the United Nations, World Trade Organization, and International Energy Agency, to advocate for policies that support mineral security and sustainable development.

Developing domestic sources of critical minerals is paramount for India's sustainable economic growth and the adoption of green technologies. This can be achieved through a multi-pronged approach that involves promoting exploration and mining activities by both public and private sector entities.

Establishing a specialized agency, akin to Australia's CSIRO, dedicated to critical minerals, would further bolster India's capabilities in this domain. Transparency in the supply chain is crucial, necessitating measures to ensure traceability from extraction to end-use. Moreover, investment in research and development is essential to innovate new technologies for efficient extraction, processing, and recycling of critical minerals.

A comprehensive national strategy for critical minerals is needed to identify priority minerals, promote domestic exploration and mining, and ensure sustainability. Amendments to the Mines and Minerals (Development and Regulation) Act, 1957, are necessary to exclude critical minerals from atomic minerals, enabling their processing by private sectors.

Regular updates to the assessment of critical minerals are essential to adapt to changing domestic and global scenarios. Prompt prospecting, exploration, and mining of critical minerals are vital to meet emissions reduction and climate change mitigation goals.

India can leverage international cooperation and partnerships, such as the Mineral Security Partnership (MSP) and bilateral agreements with countries like Australia, Canada, Japan, and South Africa, to strengthen its position in critical mineral exploration, development, processing, and trade. By investing in research and development initiatives and collaborating with resource-rich nations, India can enhance its processing and manufacturing capabilities, becoming a global hub for critical minerals. This will not only advance India's economic interests but also contribute to global clean energy accessibility and affordability, particularly for developing nations.