India’s Push to Secure Critical Minerals

Context 

The Union Budget 2024–25 proposes targeted customs duty exemptions for important minerals, including lithium, acknowledging energy security as a top priority. This calculated action demonstrates India’s resolve to advance its zero-emission goals and quicken the transition to electric vehicles.

This exemption attempts to reduce resource and production costs, boost manufacturing, and foster innovation in electric mobility solutions because lithium-ion batteries continue to be the most important and expensive component of electric vehicles (EVs).

About Critical Minerals

• Critical minerals are those that are necessary for both national security and economic growth. Supply chain vulnerability and disruption may result from the scarcity of these minerals or even from their concentration of existence, extraction, or processing in a small number of geographic regions.
• They are essential parts of many technologies, including electronics, healthcare, defense, and clean energy (solar panels, wind turbines, and electric cars).
• Critical minerals are susceptible to disruptions in the supply chain and variations in price due to their concentration in a small number of nations.
• 30 such minerals are essential to India’s technology and renewable energy sectors, according to the Ministry of Mines. They are – Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, Platinum Group Elements (PGE), Phosphorous, Potash, Rare Earth Elements (REE), Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium, Cadmium.

Challenges Related to Critical Minerals for India

• India’s Import Dependency – There are serious economic and geopolitical hazards associated with India’s over reliance on imports for essential minerals. Considering the geopolitical concentration of these resources, this dependency is especially worrisome.
• Exploration Conundrum – The country’s geological surveys have identified potential deposits in areas like Jammu and Kashmir, but large-scale commercial extraction has not yet materialized. The recent discovery of 5.9 million tonnes of lithium reserves in Jammu and Kashmir, while promising, requires significant investment and time for development. Despite recent efforts, India’s domestic exploration for critical minerals remains in its infancy.
• Missing Links in Value Chains – One major obstacle is India’s poor ability to process and refine essential minerals. Although the nation has access to raw minerals, it must rely on other nations, mostly China, for refined products due to a lack of indigenous processing capabilities.
• Balancing Extraction and Ecology – There are frequently large environmental costs associated with the extraction and processing of essential minerals. Increased carbon emissions, water pollution, and habitat damage are all possible outcomes of mining activities. India, which is already battling environmental issues, must find a way to meet both its vital mineral needs and ecological preservation.
• Price Volatility – Extreme price swings in the crucial mineral market have an effect on India’s competitiveness and industrial costs. Recent sharp increases in lithium costs have an impact on the economics of producing electric vehicles. 

Measures for Better Management of Critical Minerals in India

• Critical Mineral Diplomacy – Creating International Coalitions for Resource Security India ought to step up its “critical mineral diplomacy” initiatives and form strategic alliances with nations that are abundant in natural resources. This might entail giving Khanij Bidesh India Limited more authority to negotiate government-to-government agreements.
• Circular Mineral Economy – Create a strong circular economy for essential minerals by: Recovering valuable minerals through the application of cutting-edge e-waste recycling technology. assembling end-of-life products that contain essential minerals into a national database. 
• Mineral Tech Leap – Enhance technological proficiency in the mining and processing of key minerals by: Forming a key Minerals Technology Mission, modeled after the successful space and atomic energy initiatives. Providing tax breaks for research and development expenditures in vital mining technology.
• GeoMapping Revolution – Boost and update national mineral exploration initiatives by: Making use of cutting-edge geological mapping methods, such as artificial intelligence and machine learning. Completing thorough satellite and airborne studies of possible mineral-rich regions.
• Green Mining Initiative – Create environmentally friendly mining techniques suited to India’s distinct mining environment: Putting strong environmental regulations into practice for mining vital minerals. Creating a thorough program for the rehabilitation of mined land.
• Skill India for Critical Minerals – In order to close the skills gap in the critical minerals industry, technical schools should offer specific courses on the geology, extraction, and processing of critical minerals. Opening centers for vocational training in areas with abundant mineral resources.
• Mineral Processing Parks – Create zones specifically for processing minerals to increase domestic capacity: Providing these zones with streamlined regulatory procedures and tax incentives. Provide top-notch water, power, and logistical support infrastructure.

Way Forward

To ensure sustainable management of critical minerals, India must enhance its domestic exploration and processing capabilities, foster international alliances for resource security, and promote a circular economy through advanced recycling technologies. Implementing green mining practices and robust environmental regulations will balance ecological preservation with mineral extraction. Additionally, investing in technological advancements and skill development in the critical minerals sector, along with establishing dedicated mineral processing zones, will reduce import dependency and stabilize supply chains, ultimately supporting India’s economic growth and energy security goals.

SOURCE: The Financial Express

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