India's New Policy on Critical Minerals

Summary of Key Facts, Policies, and Developments

1. Policy Development:

• The Ministry of Mines is developing a new policy for stockpiling critical minerals, expected to be finalized within one month.
• This initiative responds to increasing supply chain vulnerabilities and aims to reduce import dependency.

2. Importance of Critical Minerals:

• Key minerals include copper, lithium, nickel, cobalt, and rare earth elements vital for clean energy technologies, such as:
  • Wind turbines
  • Electricity networks
  • Electric vehicles (EVs)
  • Battery manufacturing

3. Current Challenges:

• India relies 100% on imports for most critical minerals and has low domestic processing capacity.
• India's overseas efforts via Khanij Bidesh India Ltd (KABIL) for securing mineral assets have encountered significant obstacles, particularly in Australia, Vietnam, Mali, and Chile.
• Progress has only been noted in Argentina with the acquisition of five lithium brine blocks.

4. Strategic Framework:

• The National Critical Minerals Mission (NCMM) has proposed the National Critical Mineral Stockpile Programme:
  • Aims to mitigate global supply chain risks.
  • Budget allocation of Rs 500 crore from 2024-25 to 2030-31.
  • Plans to stockpile at least 5 critical minerals to meet domestic needs during emergencies.

5. Domestic Processing Capacity:

• To address dependence on imports and China, which controls 90% of global critical mineral processing, India is enhancing domestic processing capabilities.
• Four states designated for critical mineral processing plants:
  • Andhra Pradesh & Gujarat: Rare earth elements
  • Odisha: Nickel
  • Maharashtra: Lithium

6. Indigenous Technology Development:

• The government recognizes the need for indigenous technology development for mineral processing as countries with advanced technology are reluctant to share.
• Nine Centers of Excellence have been established to promote progress in this area.

7. Future Schemes:

• Plans are in place for a new scheme focusing on lithium and nickel to support the battery manufacturing ecosystem.
• Efforts to frame a comprehensive policy to promote critical mineral processing, targeting strategic minerals essential for electric vehicles.

Economic Context:

• The initiatives signify a shift towards self-reliance in critical mineral sourcing and processing in line with the broader goals of India’s economic independence and sustainability in the energy sector.

Conclusion:

• The policy initiatives and strategic actions underline India's commitment to securing essential minerals, enhancing domestic capacities, and fostering technology development in critical mineral processing. These steps are aimed at safeguarding against future supply chain disruptions and positioning India as a key player in the global clean energy movement.