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India Unveils New Critical Minerals Strategy

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India Unveils New Critical Minerals Strategy

New Delhi has identified 30 minerals considered critical to both national and economic security, part of its vision for Atmanirbhar Bharat.

India Unveils New Critical Minerals Strategy
Credit: Depositphotos

India has unveiled its first comprehensive report on critical minerals, including a list of 30 such minerals. “The effort is India’s roadmap for Atmanirbhar Bharat,” Minister of Coal, Mines and Parliamentary Affairs Pralhad Joshi said while announcing the report. Atmanirbhar Bharat is the Modi government’s push for a “self-reliant India.”

This report comes at a crucial time. The conversation on critical minerals has become mainstream, as countries recognize their importance for growth and technological advancements. Many countries have already released their own critical minerals strategies and categories; now India is the latest member of the club. It has become active in the critical minerals sector only in the last few years, as the threat to India’s national security has taken center stage. 

Different countries have identified different numbers of critical minerals; the United States’ list has 50 minerals, the EU’s has 34, and Australia’s identified 26. India has identified 30 minerals as “critical” based on a three-stage assessment process. Cobalt, lithium, nickel, copper, and rare earth elements like dysprosium, holmium, and samarium are a few among them. The release of the total numbers of critical minerals signals an intent to push further for their recognition and identify the global supply chains involved for critical minerals beyond the traditional ones like cobalt, lithium, and copper. The political objective behind this unveiling is to re-emphasize the resiliency of the critical minerals supply chain, which is key to India’s economic and security needs.

Critical Minerals: Economics and Security

The release of India’s new critical minerals report reflects two crucial strategic considerations. First, India wants to protect strategic sectors like defense, space, telecommunications, and high-tech electronics, which are critical for its security. Second, India seeks to ensure sustainable, resilient, and inclusive growth directly associated with furthering economic prosperity. The latter aim is directly linked to its vision of achieving a net-zero emissions target by 2070. 

India’s focus on critical minerals is due to the realization that the next economic growth story must go through two parallel processes. One is providing better living standards and establishing manufacturing in strategic sectors, and the second is to follow and invest more in sustainable models of growth, energy, and lifestyle, focusing on decarbonization. For both these parallel tracks to progress efficiently, India will need a consistent and resilient supply of critical minerals. Clean energy technologies like low carbon emission tech, renewable energy, e-mobility, aviation, medicine, and advanced batteries all rely on critical minerals, making them even more important. 

The definition of critical minerals stated in the report shows how the Indian government looks at the geopolitics involved. It states that “critical minerals are those minerals which are essential for economic development and national security, the lack of availability of these minerals or even concentration of existence, extraction or processing of these minerals in few geographical locations may lead to supply chain vulnerability and disruptions.” 

Behind words like “concentration,” “vulnerability,” and disruptions” lies India’s concern regarding China, which dominates the critical mineral supply chain. New Delhi would like to ensure that any dependency on China does not put India in a compromising position. The current border standoff between India and China has only strengthened the Indian government’s concern about China. In addition, many of the central government’s economic initiatives depend on access to trusted and resilient critical mineral resources. This highlights the importance of the “economic development” piece of the definition. 

The report’s release is part of the Indian government’s incremental strategy plan, which has been under execution for a long time. The strategy’s focus has been two-pronged: setting up institutional structures and policy frameworks domestically, and developing partnerships with like-minded countries across the globe to strengthen resilient critical mineral supply chains for domestic needs. 

Critical Minerals and India’s New Partnerships

India placed a particular emphasis on partnerships with friends from the Quad – Australia and the United States – and mineral-rich partners like Argentina, Chile, and Bolivia, seen as essential for its critical mineral strategy. 

In 2019, a Joint Venture Company (JVC) named Khanij Bidesh India Ltd. (KABIL) was established with the participation of National Aluminum Company Ltd. (NALCO), Hindustan Copper Ltd. (HCL), and the Mineral Exploration Company Ltd. (MECL). It aimed to ensure the “mineral security of the nation” and realize “the overall objective of import substitution,” as Joshi, the minister of mines, stated. 

KABIL aims to carry out the “identification, acquisition, exploration, development, mining and processing of strategic material overseas for commercial use” to fulfill domestic economic needs. Since its inception, we have seen some progress, mainly focused on critical minerals like lithium and cobalt. In 2022, an MoU was signed between KABIL and Australia’s Critical Minerals Facilitation Office, which identified “five targeted projects” – two involving lithium and three cobalt – in 2023. India is also expected to soon sign an agreement with Argentina to secure lithium blocs.

Recently during the visit of Prime Minister Narendra Modi to the United States, India joined the U.S.-led Mineral Security Partnership (MSP), which envisions “a common objective of diversifying and securing our critical mineral supply chain.” Joining MSP not only demonstrated increased mutual trust between India and the U.S., but it also shows that India is shedding its hesitation about irking China and even de-hyphenating its relations with Russia, another important country in the critical mineral sector. 

Also, during Modi’s U.S. visit, Indian company Epsilon Carbon Limited announced a $650 million investment in a greenfield electric vehicle battery component factory, the most significant Indian investment to date in the U.S. electric vehicle sector. The closer partnership with the United States in the critical mineral sector will help “enable diversified private sector investment and catalyze public sector financing,” which India plans to leverage. It also entices other countries like South Korea that would like to partner with India in the sector. 

Another vital partner in this strategy is Australia; India sees it as “a stable, reliable, and trusted supplier of high-quality mineral resources for India.” This partnership started in 2020 with the signing of an MoU and has progressed fast. In this year’s joint statement by the two prime ministers, both countries “reiterated their shared commitment to building secure, resilient and sustainable critical minerals supply chains” in important sectors like semiconductors, defense, and clean energy. 

Partnering and joining with important countries and initiatives helps India to get better technical expertise and knowledge to build capacity and capabilities at each stage of the value chain: exploration, extraction, processing, manufacturing, and recycling. With the discovery of lithium deposits potentially amounting to 5.9 million tons, the need to develop better technical expertise has become even more vital for India.   

The report is a welcome development in achieving self-reliance in the critical minerals sector. The report also offers recommendations for additional actions, like setting up a National Institute or Center of Excellence on critical minerals (borrowing from Australia’s example) and revisiting the list of critical minerals every three years. 

The report gives much-needed clarity regarding the list of critical minerals for India, but this is just the first step. Following this, India will have to invest more in developing partnerships abroad and building capacities and technical expertise at home to leverage the existing opportunities. This is a long journey, and India has just taken the first few steps.