Recently, the Central Government has initiated the process of auctioning critical minerals for the first time.
The government launched auctions for 20 blocks of such minerals, including 5.9 million-tonne lithium reserves discovered in the Reasi district of Jammu and Kashmir.
CRITICAL MINERALS:
Critical minerals are those minerals which are essential for economic development and national security, the lack of availability of these minerals or even concentration of existence, extraction or processing of these minerals in few geographical locations may lead to supply chain vulnerability and disruption.
The Ministry of Mines constituted a seven-member Committee to identify the list of minerals critical to our country.
The critical minerals identification process tries to address five core objectives:
Based on a three-stage assessment process and considering important parameters such as reserve position, production, import dependency, use for future technology/clean energy and requirement of fertilizer minerals in an agrarian economy, the Committee has identified a set of 30 critical minerals.
These 30 minerals were declared "critical" by the central governmentin July 2023.
SIGNIFICANCE OF CRITICAL MINERALS:
Economic development:
The future global economy will be underpinned by technologies that depend on minerals such as lithium, graphite, cobalt, titanium, and rare earth elements. These minerals are essential for the advancement of many sectors, including high-tech electronics, telecommunications, transport, and defence.
National security:
The lack of availability of these minerals or concentration of extraction or processing in a few geographical locations outside India can lead to supply chain vulnerabilities. Identifying and developing value chains for the minerals can reduce India’s dependence on import and promote mineral and energy security.
Geostrategic significance:
Covid pandemic exposed the limitations of global supply chain and countries are increasingly diversifying their supply chain through measures like the China+1 strategy. Having a credible source of critical mineral reserves can help India benefit from this diversification.
Eg: If the perceived size of the Lithiumreserves in J&K is borne out by further exploration, India could jump ahead of China in the global Li supply chain.
Support transition to net-zero carbon energy systems:
Critical minerals are essential for the global shift towards a low carbon emissions economy and achieving 'Net Zero' targets through renewable energy technologies.
They are also crucial for India's goal of achieving 30% electric vehicle (EV) penetration in private cars, 70% in commercial vehicles, and 80% in two and three-wheelers by 2030, supporting the National Mission on Transformative Mobility and Storage.
CHALLENGES FACED BY INDIA:
Limited Domestic Reserves and Exploration:
India, despite having a variety of mineral resources, often lacks substantial reserves in certain critical minerals.
For example, minerals like lithium and cobalt, which are crucial for battery technology, are not abundantly available in India.
Lack of Advanced Technology and Processing Facilities:
Another challenge in India's mining and processing of critical minerals stems from a lack of advanced technology and processing facilities.
A prime example is the difficulty in processing rare earth minerals from monazite sands in Kerala and Tamil Nadu, where India struggles due to inadequate technological capabilities.
Dependence on Imports:
Due to the lack of substantial domestic reserves for many critical minerals, India relies heavily on imports. This dependence on foreign sources for critical raw materials makes the country vulnerable to supply chain disruptions, geopolitical tensions, and fluctuating international market prices.
For instance, China, which dominates the global rare earth market, is a major source for these imports, exposing India to geopolitical risks and market fluctuations.
Environmental and Social Issues:
Mining activities for critical minerals often lead to environmental and social issues.
For instance, the extraction of ilmenite, a mineral important for producing titanium, in Tamil Nadu has led to environmental degradation along the coastline. This includes beach erosion and damage to the coastal ecosystem, affecting the livelihoods of local fishing communities.
Government initiatives:
MMDR Act:
Through an amendment in the Mines and Minerals (Development and Regulation) Act (MMDR Act) in August 2023, 24 minerals were notified as critical and strategic minerals.
National Mineral Policy:
Updated in 2019, this policy also focuses on the exploration and exploitation of critical minerals, ensuring that India's mineral potential is tapped effectively.
Khanij Bidesh India Ltd (KABIL):
This is a joint venture between three state-owned companies — National Aluminium Company Ltd (NALCO), Hindustan Copper Ltd (HCL), and Mineral Exploration Corporation Ltd (MECL). KABIL's aim is to ensure a consistent supply of critical minerals and rare earth elements by acquiring and developing mineral assets overseas.
Research and Development:
The government supports R&D initiatives for the exploration, mining, processing, and recycling of critical minerals. Indian Rare Earths Limited (IREL), a public sector unit, plays a significant role in the research and production of rare earth minerals.
Partnerships and Alliances:
India is actively seeking international partnerships to secure supplies of critical minerals. For example, it has engaged with countries like Australia for the supply of lithium and cobalt.
WAY FORWARD:
To succeed in its critical mineral strategy, India must develop its entire value chain, encompassing geoscience, exploration, mineral extraction, processing, manufacturing, and recycling of critical minerals.
There is also a need for establishing a National Institute or Centre of Excellence on critical minerals on the lines of Commonwealth Scientific and Industrial Research Organisation (CSIRO).
Commonwealth Scientific and Industrial Research Organisation: (CSIRO):
CSIRO is an Australian Government corporate entity and one of the world’s largest mission-driven multidisciplinary science and research organizations.
But it is also the largest minerals research and development organisation in Australia and one of the largest in the world.
A wing in the Ministry of Mines can be established as a Centre of Excellence for Critical Minerals (CECM). The Centre of Excellence for Critical Minerals will focus on identifying more efficient ways for discovering next generation critical mineral deposits through geological knowledge, data analytics and modelling, and machine learning capability.
Creating a supportive policy environment is crucial for the development of the critical minerals sector. This includes clear regulations, incentives for exploration and processing activities, and policies that encourage domestic and foreign investment in this sector.
India must actively engage in bilateral and plurilateral arrangements for building assured and resilient critical mineral supply chains.
PRACTICE QUESTION:
Q. What are critical minerals? Analyse the significance of developing value chains for critical minerals to India. (10 marks, 150 words)
