Critical Minerals

Critical Minerals

News: India recently launched the auction of 18 critical and strategic mineral blocks valued at around 30 lakh crore.

Background:
• The recent move aligns with the country’s ambition to generate 50 percent of its electric power from non-fossil sources by 2030.

What are Critical minerals?
• Critical minerals are metallic or non-metallic elements that are essential for modern technologies, economies, or national security, and have a supply chain at risk of disruption.
• These minerals, such as lithium, graphite, cobalt, titanium, and rare earth elements, are part of multiple strategic value chains. They are crucial for clean technologies initiatives such as zero-emission vehicles, wind turbines, solar panels; information and communication technologies, including semiconductors etc.
• The Centre for Socio and Economic Progress (CSEP) in its paper “Assessing the Criticality of Minerals in India” (2023) evaluated the criticality of minerals in India based on two dimensions.
o economic importance for the Indian economy and
o supply risks

Significance:
• Economic Development: Industries such as high-tech electronics, telecommunications, transport, and defense heavily rely on these minerals.
• Green Technologies: Critical minerals are essential for green technologies like solar panels, wind turbines, batteries, and electric vehicles.
• National Security: These minerals are essential for the economic and security interests of nations due to their fundamental role in manufacturing high-tech products, renewable energy technologies, electric vehicles (EVs), defense systems, and various other applications.
• The future global economy will be underpinned by technologies that depend on minerals such as lithium, graphite, cobalt, titanium and rare earth elements (REE).
• The lack of availability of these minerals or concentration of their extraction or processing in a few countries may lead to supply chain vulnerabilities.

Government of India initiatives:
• An amendment to the MMDR Act in 2023 identified 24 minerals as critical and strategic, empowering the Central Government to grant mineral concessions. The amendment confers the power to grant mineral concession of these minerals to the Central Government and the revenue generated from these auctions shall accrue to State Governments.
• Geological Survey of India’s role in mineral exploration. Example, finding lithium ore reserves in J&K’s Salal-Haimna region of Reasi District.
• A joint venture company namely Khanij Bidesh India Ltd. (KABIL) has been mandated to identify and acquire overseas mineral assets of critical and strategic nature such as lithium, cobalt and others.
• India was recently inducted into the Mineral Security Partnership, which is an ambitious new initiative announced by the United States and key partner countries in June 2022. The goal of the alliance is to ensure that critical minerals are produced, processed, and recycled in a manner that supports the ability of countries to realize the full economic development benefit of their geological endowments. The focus of the grouping would be on the supply chains of minerals such as Cobalt, Nickel, Lithium and also the 17 “rare earth” minerals.