New Delhi:
Access to critical minerals has emerged as a key factor in achieving India’s long-term net zero emissions target, which has led the country to sign agreements with resource-rich countries including Australia, Argentina and Chile for mining, exploration and investment. ₹34,300 crore (about $4 billion) National Critical Mineral Mission to secure supplies amid China’s tight control over global reserves and processing.
Critical minerals such as lithium, cobalt, nickel and rare earth elements are indispensable for solar panels, wind turbines, electric vehicle batteries and other clean energy technologies essential to India’s climate goals. However, China’s hold on both mining and refining – it processes about 90% of the world’s rare earth elements despite mining only half – has created a strategic vulnerability for countries making energy transitions. With global demand for these minerals expected to more than double by 2030, India faces the dual challenge of gaining access to geographically concentrated resources while also dealing with intense US-China competition on supply chains.
The strategy was outlined by the mines ministry in response to HT’s queries. The ministry said it is actively engaged in several strategic partnerships to strengthen critical mineral value chains, including the US-led Mineral Security Partnership – which was launched in 2022 with 14 countries and the European Commission – the Indo-Pacific Economic Framework, the India-UK Technology and Security Initiative, the Quad and the Strategic Mineral Recovery Initiative, a US-India partnership announced in February following Prime Minister Narendra Modi’s visit to the US. Was.
China has increased pressure on the region over the past few years by imposing tighter controls and refining technologies, prompting India’s efforts.
A discussion paper titled “India’s Mineral Requirements in a World of Economic and Geopolitical Transition” from the Center for Social and Economic Progress (CSEP) said, “The key message is that India must urgently take a strategic approach to its mineral economy. Minerals are essential to our industrial needs, including defense and strategic industries. The global shift towards energy decarbonization is creating a mineral-dependent world, and this is particularly acute between the US and China. It’s happening amid geopolitical competition.”
Think tanks have warned that India must accelerate its efforts to deal with the geopolitical challenges associated with acquiring these reserves. Policymakers believe that China’s dominance and steps like export restrictions will have significant impacts.
multidimensional approach
India’s response focuses on the National Critical Mineral Mission, launched in January, which focuses on increasing domestic production, acquiring assets abroad, recycling critical minerals, and developing trade and markets, among other priorities.
“Apart from acquiring these mines abroad through Khanij Videsh India Ltd (KABIL), we are also trying to increase domestic mining as soon as possible. The biggest issue with rare earths is not that they are rare, but because they exist in trace quantities and can be difficult to extract,” said an official on condition of anonymity.
“The second issue is that refining is not only expensive but also has a huge pollution impact,” the official said.
Domestic production increased
To secure raw material for magnet manufacturing, the Mines Ministry has auctioned the Navatola-Laband rare earth element (REE) block in Uttar Pradesh. Additionally, three blocks have been auctioned in which REEs are associated with other minerals: Katghora Lithium Block in Chhattisgarh, Dombarahalli Phosphate Block in Karnataka and Patehra REE and Graphite Block in Madhya Pradesh.
Exploration license blocks—Ontilu-Chandragiri REE block in Andhra Pradesh and Navatala-Devigarh REE block in Rajasthan—have also been auctioned. Two blocks with REE from Rajasthan (one mining license, one composite license) and one block each from Karnataka (one mining license), Maharashtra (one composite license) and West Bengal (one composite license) are going through the auction process in tranche 6.
Geological Survey of India has significantly increased exploration by undertaking 49 REE projects in 2022-23, 59 in 2023-24, 78 in 2024-25 and 95 in 2025-26. Since 2015, GSI has inferred 482.6 million tonnes of REE ore resources at various cut-off grades across 34 exploration projects.
The ministry has also auctioned composite licenses for 13 offshore mineral blocks under Tranche I, including three blocks of lime clay off the Gujarat coast, three blocks of construction sand off the Kerala coast and seven blocks of polymetallic nodules and crust off the Great Nicobar Island coast.
policy momentum builds
According to the Council on Energy, Environment and Water’s (CEEW) September report, “Making India a hub for critical minerals processing”, India’s ambitious trajectory to achieve net zero by 2070 includes energy independence and carbon neutrality that depends on large-scale deployment of clean energy technologies such as solar, wind and batteries.
Recognizing the strategic importance of critical minerals, India’s G20 presidency in 2023 gained substantial momentum in policy decisions governing them. Following successful talks during the G20 Energy Transition Working Group, the Ministry amended the Mines and Minerals (Development and Regulation) Act to ease the process of critical mineral block auctions. A key action point of the mission is to develop four processing parks where existing capacities should be leveraged.
India is not among the top three producing countries in terms of many critical minerals relevant to clean energy transition technologies and the defense sector. CEEW has found that it is dependent on imports for almost all of its lithium, cobalt and nickel requirements.
According to the International Energy Agency, rare earth elements – a subgroup of critical minerals that includes 17 elements such as neodymium, promethium and cerium – are used extensively in clean energy systems and other advanced technologies.
Understanding China’s rise
The transition away from fossil fuels, which provide 80% of the world’s primary energy, will create a mineral-dependent global economy, the CSEP paper notes. India is experiencing rapid economic growth, rising to the challenge of a rapid energy transition, with manufacturing playing a larger role, making minerals increasingly important to the economy.
China’s success lies in its vertical integration strategy. The country mines 50% of the world’s rare earth elements, but refines and produces about 90% of processed rare earth elements and industrial products using highly polluting and energy-intensive processes. For cobalt and lithium used in electric vehicle batteries and other low-carbon products, China imports raw materials from major producers – the Democratic Republic of the Congo for cobalt and Australia for lithium – but dominates world markets for processed metals from both, the CSEP paper notes.
environmental trade-offs
According to the IEA, critical minerals present an environmental and social conundrum. While essential in the fight against climate change, mining and processing these minerals can increase greenhouse gas emissions, pollute the environment and bring risks to nearby communities.
Rapid developments in zero-carbon technology have increased the world’s need for critical minerals, and demand is expected to grow. The IEA estimated last month that if governments meet their stated energy and climate pledges, critical mineral demand could double from 2022 levels by 2030 and quadruple by 2050.
However, increasing production remains challenging. It takes an average of 15.5 years to develop new mining projects, from discovery to first production, depending on the mineral, location and type of mine. The IEA said longer working hours raise questions about the world’s ability to increase output as demand increases, especially if companies wait for deficits to emerge before committing to new projects.
Large-scale refining and processing could pose environmental challenges for India, while pressure on land and forests is also expected. HT reported on July 16 that the Union Environment Ministry is considering faster forest and environment clearance for critical or strategically important minerals, including rare earth elements, under a separate heading in its Environment 2.0 portal. These proposals are not in the public domain.
Mining operations are governed by the Mines and Minerals (Development and Regulation) Act, 1957 and Mineral Conservation and Development Rules, 2017, which mandate scientific mining practices, approved mine plans (including environment management plans) and implementation of progressive and final mine closure plans covering air, water and waste management as well as land reclamation.
The Ministry of Mines has implemented sustainable mining practices by making provisions under Chapter V of the Mineral Conservation and Development Rules, 2017. Provisions have been included for precautions against air pollution, prevention of discharge of poisonous liquids, precautions against noise and control of surface subsidence.
To add citation from Federation of Indian Mineral Industries (FIMI)
