Unlocking Potential in Critical Minerals

Author: Neha Chauhan 

Introduction: the Comprehensive List of Critical Minerals

The world has witnessed unprecedented technological advancements and growing demand for clean energy solutions in recent years. This transformative shift towards a sustainable and low-carbon future has underscored the critical importance of securing a reliable supply of some crucial minerals. The Government of India has recognised this urgency and has diligently worked to identify and develop domestic sources of these minerals. Without a comprehensive list of minerals critical for the country, formulating effective policy measures to safeguard against supply chain vulnerabilities becomes challenging. To address this, the Central Government established an expert committee tasked with identifying India’s critical minerals through a rigorous three-stage assessment process.

Considering essential parameters such as the country’s resource and reserve positions, production capabilities, import dependencies, and their applications in future technologies and clean energy solutions, the committee has successfully identified a set of 30 critical minerals. On June 28, India officially unveiled this comprehensive list of critical minerals, recognising its paramount significance for economic development and security. This list comprises minerals like Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, PGE, Phosphorus, Potash, Rare Earth Elements (REE), Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium, and Cadmium.

Why is it essential to identify critical minerals?

Identifying critical minerals is vital for countries worldwide due to their pivotal role in driving economic development and safeguarding national security. These minerals, essential for various industries, manufacturing processes, and defence equipment, have been recognised by most countries based on national priorities and future requirements. The potential risks stemming from the concentration of extraction or processing in a few locations have become evident in recent years. Global trade tensions, pandemic-induced supply chain disruptions, and geopolitical conflicts have exposed these critical minerals’ supply chain vulnerabilities and highlighted the dangers of overreliance on production concentrated within a single country. A notable example occurred in 2010 when China suspended exports of REEs to Japan for 59 days, leading to a significant surge in rare earth oxide prices, impacting industries heavily reliant on these minerals. 

In this context, a recent report titled ‘Addressing Vulnerabilities in the Supply Chain of Critical Minerals’ emphasised that 15 countries globally hold more than 55% of seven critical minerals, including Cobalt, Copper, Graphite, Lithium, Manganese, Nickel, and REE. Interestingly, India’s list of critical minerals encompasses all these elements except manganese. Recent data also highlights India’s 100% import dependency for certain elements (see Table 1). 

 Table 1: Net import reliance for some critical minerals of India

Source: Unlocking Australia-India Critical Minerals Partnership Potential (2021)

In response to these challenges, countries like India are taking proactive measures to minimise risks to their green growth strategies caused by supply chain bottlenecks. By formulating comprehensive lists of critical minerals, India aims to devise effective policies ensuring a reliable domestic supply. Given India’s complete dependence on imports for specific elements, this exercise becomes even more critical. Identifying critical minerals can also help India diversify its supply sources, reduce reliance on a limited number of countries, and enhance its resilience against supply chain vulnerabilities. This exercise of identifying and prioritising critical minerals gives India a solid foundation to formulate robust policies, fortifying its position against supply chain vulnerabilities and reinforcing its growth trajectory. By recognising the significance of critical minerals and adopting proactive strategies, India aims to secure its long-term economic and national interests while contributing to global resource sustainability.

What’s Next

Countries like India, recognising the strategic importance of critical minerals, have taken commendable steps in formulating comprehensive lists and effective policies. They safeguard their green growth strategies and strengthen their resilience against potential supply chain bottlenecks.

The lessons of the past, such as the rare earth elements dispute, serve as stark reminders of the consequences of inadequate resource planning. As countries increasingly rely on these minerals to drive industries and technological advancements, prioritising resource security becomes an imperative responsibility. To this end, governments must periodically revise their lists of critical minerals based on changing priorities and geopolitical dynamics.

Identifying critical minerals is just the first step in achieving the broader goal of resource security. India, for instance, has been proactive in establishing institutional structures and policy frameworks domestically while forging partnerships with countries worldwide. Notably, ventures like Khanij Bidesh India Ltd. (KABIL), a joint venture between three public sector undertakings, are making strides in securing crucial mineral reserves abroad, such as lithium blocks in Argentina.

Recent discoveries, such as the substantial lithium reserves found in Jammu and Kashmir, further emphasise the urgency of honing technical expertise to maximise the gains from these discoveries. Union Minister Nitin Gadkari’s assertion that harnessing these reserves could propel India to become a global leader in the electric vehicle segment underscores the transformative potential of such endeavours.

In pursuing resilient critical mineral supply chains, nations must continue their efforts in resource planning, technological advancement, and international partnerships. By embracing a holistic approach to address challenges and capitalising on opportunities, countries can secure their future economic growth, energy independence, and national security while contributing to a sustainable path of development.