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What are Critical Minerals?


A national critical minerals strategy for India, underpinned by the minerals identified in this study, can help focus on priority concerns in supply risks, domestic policy regimes, and sustainability.


GS III- Indian Economy

Dimensions of the Article:

  1. What are Critical Minerals?
  2. Why is this resource critical?
  3. Challenges Faced by India in Assuring Resilient Critical Minerals Supply Chains
  4. Way Forward for India’s Critical Minerals Strategy

What are Critical Minerals?

  • Critical minerals are elements that are the building blocks of essential modern-day technologies, and are at risk of supply chain disruptions.
  • These minerals are now used everywhere from making mobile phones, computers to batteries, electric vehicles and green technologies like solar panels and wind turbines.
  • Based on their individual needs and strategic considerations, different countries create their own lists.
  • However, such lists mostly include graphite, lithium and cobalt, which are used for making EV batteries; rare earths that are used for making magnets and silicon which is a key mineral for making computer chips and solar panels.
  • Aerospace, communications and defence industries also rely on several such minerals as they are used in manufacturing fighter jets, drones, radio sets and other critical equipment.

Why is this resource critical?

  • As countries around the world scale up their transition towards clean energy and digital economy, these critical resources are key to the ecosystem that fuels this change.
  • Any supply shock can severely imperil the economy and strategic autonomy of a country over-dependent on others to procure critical minerals.
  • But these supply risks exist due to rare availability, growing demand and complex processing value chain.
  • Many times the complex supply chain can be disrupted by hostile regimes, or due to politically unstable regions.
  • They are critical as the world is fast shifting from a fossil fuel-intensive to a mineral-intensive energy system.

Challenges Faced by India in Assuring Resilient Critical Minerals Supply Chains:

  • China’s struggle with Covid-19-related lockdowns poses a risk of slowdown in the extraction, processing, and exports of critical minerals, as it is the most dominant player in critical mineral supply chains.
  • The war between Russia and Ukraine has implications for critical mineral supply chains, as Russia is one of the significant producers of nickel, palladium, titanium sponge metal, and the rare earth element scandium, while Ukraine is a major producer of titanium and has reserves of other critical minerals.
  • The strategic partnership between China and Russia may affect critical mineral supply chains as the balance of power shifts across continents and countries.
  • Manufacturing renewable energy technologies and transitioning to electric vehicles would require increasing quantities of critical minerals, many of which India does not have sufficient reserves, necessitating reliance on foreign partners to meet domestic needs.

Way Forward for India’s Critical Minerals Strategy

  • India has geological potential for mining, but there are significant challenges to enable sustainable extraction.
  • Four challenges include:
    • Atomic minerals reserved only for public sector undertakings,
    • Imperative need to create a new list of critical and strategic minerals,
    • Encouraging reconnaissance and exploration of minerals, particularly deep-seated minerals, and
    • Innovative regime to allocate critical mineral mining assets.
  • India needs to determine how and where processing of minerals and assembly of critical minerals-embedded equipment will occur, as domestic sources are limited.
  • India requires a critical minerals strategy to make the country self-reliant in critical minerals needed for sustainable economic growth and green technologies.
  • The strategy should prioritize supply risks, domestic policy regimes, and sustainability, and engage in bilateral and plurilateral arrangements for building assured and resilient critical mineral supply chains.
  • The assessment of critical minerals for India needs to be updated every three years to keep pace with changing domestic and global scenarios.

-Source: Indian Express

February 2024