IMPORTANCE OF CRITICAL MINERALS
Critical minerals, often referred to as the ‘new oil’, are essential for clean energy technologies such as solar modules, wind turbines, batteries, and transmission networks. Minerals like lithium, nickel, copper, cobalt, silicon, graphite, and rare earth elements (REE) are crucial for the energy transition. The International Energy Agency predicts a four-fold increase in the demand for these minerals by 2040. However, the concentration of these mineral reserves in a few countries poses significant risks to supply chains, particularly for developing economies like India.
INDIA’S NATIONAL INITIATIVES
1. Identification and Auctioning of Minerals:
• The Ministry of Mines has identified 24 critical and strategic minerals essential for India’s growth.
• These minerals will now be auctioned by the central government, which is expected to increase exploration and revenue for state governments.
2. Incentives for Exploration:
• Private agencies are incentivized to explore deep-seated and critical minerals through Exploration Licences.
• The delisting of six minerals, including lithium, from the atomic minerals list has allowed private sector entry into their exploration and mining.
3. Auction of Mineral Blocks:
• The government has launched the auction of 20 critical and strategic mineral blocks to boost exploration and mining activities.
INTERNATIONAL ENGAGEMENTS
1. Global Partnerships:
• Under India’s leadership, the G20 has agreed to strengthen the global critical mineral value chain.
• India has joined the Mineral Security Partnership (MSP) to represent developing countries vulnerable to global supply chain disruptions.
2. Bilateral Agreements:
• India and Australia have collaborated on upstream critical mineral technologies through the India-Australia Comprehensive Economic Cooperation Agreement (CECA).
• Khanij Bidesh India Ltd (KABIL) has signed a $24 million lithium exploration and mining pact with Argentina for 5 lithium blocks.
3. Multilateral Forums:
• India can leverage forums like the Quad, Indo-Pacific Economic Framework for Prosperity (IPEF), and European Critical Minerals Club to access minerals from other geographies.
FUTURE OPPORTUNITIES
1. Technological Capability:
• The government and industry should focus on building technological capabilities in critical mineral exploration, mining, and processing.
• Awareness events and partnerships with academic institutions can bridge the gap in specialised techniques for processing and refining these minerals.
2. Circular Economy:
• India should promote the reuse and recovery of critical minerals from electronics and clean energy equipment waste through the Lifestyle for the Environment (LiFE) mission and G20 Voluntary High-Level Principles.
3. Environmental, Social, and Governance (ESG) Norms:
• Indian industries should adopt superior ESG practices to enhance transparency and traceability in supply chains, positioning their products to command a premium.
4. Trade Negotiations:
• Negotiating agreements with large demand markets like the US, Europe, and Japan is crucial to avoid trade barriers and secure supportive measures for Indian manufacturers.
CONCLUSION
India has taken significant steps to strengthen its position in the global critical minerals value chain. A stable and progressive policy framework, combined with a large domestic market, can provide a competitive edge to Indian industries. By building technological capabilities, promoting a circular economy, adopting superior ESG practices, and engaging in strategic trade negotiations, India can become a reliable node in the global supply chain for critical minerals.
SRIRAM’s
