Context: As per the latest government data, India continues to be a net importer in most of the critical minerals and China topped the list of Critical Mineral suppliers to India.
Relevance of the Topic:Prelims: Facts about Critical Minerals; MMDR Act; Khanij Bidesh India Limited (KABIL); Mineral Security Partnership.
Major Highlights:
- In FY 2023-24, India’s net import bill for critical minerals in FY 2023-24 stood at over ₹42,000 crores, with Phosphorus being the highest at ₹15,123 crore.
- Chinais a dominant supplier of critical minerals to India primarily in categories like ore, waste, scrap and unwrought (raw), metallic or finished product forms.
- The imports included- cobalt, molybdenum, nickel, potash and glauconite, rare earth elements (REE), tantalum, titanium and tungsten.
- Apart from China, India imported critical minerals from other countries. It includes-
- Gallium and Indium (100% from the US), niobium (Germany and Russia), selenium (Japan), tin (Indonesia), platinum group of elements (UK and UAE), phosphorous (Jordan), vanadium (Germany and Mexico), and zirconium (Indonesia and France).
What are Critical Minerals?
- Critical minerals are metallic or non-metallic elements that are:
- Essential for modern technologies, economy and national security, such as electronics, renewable energy, and defense.
- Subject to disruption of supply chain, often due to limited reserves, geopolitical issues, or complex processing.
Utility of Critical Minerals:
- Renewable Energy sector: Graphite, Lithium, Cobalt, and Nickel are key components of batteries for electric vehicles (EVs).
- Defense and Aerospace: Tungsten, molybdenum, and REEs are used in advanced weaponry, fighter jets, satellites, and aircraft.
- High-Tech Manufacturing: REEs, Indium, and Gallium are used in electronics, semiconductors, and renewable technologies.
- Agriculture: Fertiliser minerals like potash and phosphate.
Global Distribution of Critical Minerals:
- According to the 2019 USGS Mineral Commodity Summaries report, China is the world’s largest producer of 16 critical minerals. China is responsible for 60% of global production of rare earth elements.
Critical Minerals in India:
- Different countries create their own lists of critical minerals based on their individual needs and strategic considerations. However, such lists mostly include graphite, lithium and cobalt.
- In 2023, the Ministry of Mines, India classified 30 minerals as critical minerals.
- The list comprises 30 minerals including 17 rare earth elements (REEs) and six platinum-group elements (PGE).
- Ten minerals on the list are 100% import-dependent, including- Lithium, Cobalt, Nickel, Vanadium, Niobium, Germanium, Rhenium, Beryllium, Tantalum, and Strontium.
- India relies heavily on imports (mostly from China) for critical minerals. The demand for these minerals may more than double by 2030.
Steps taken by the Government of India:
1. MMDR Amendment Act, 2023:
- The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) is the primary legislation governing the mining sector in India.
- The MMDR Amendment Act, 2023:
- Empowers Central Government to exclusively auction mining lease and composite licence for 24 critical and strategic minerals (listed in the Part-D of the First Schedule to MMDR Act).
- Opened mining of critical minerals to private players which was previously limited to public sector undertakings.
- To boost exploration, Exploration Licence for reconnaissance and prospecting operations has been introduced for 29 deep-seated minerals.
2. Establishment of KABIL:
- A Joint Venture Company among NALCO, HCL and MECL named Khanij Bidesh India Limited (KABIL) was formed in August 2019.
- KABIL's mandate is to ensure India's supply of critical and strategic minerals:
- Identifying, exploring, acquiring, developing, mining, and processing strategic minerals.
- Focus on procuring battery minerals like Lithium and Cobalt.
3. Global Partnerships:
- India has joined the Mineral Security Partnership with 13 countries, including the U.S., Australia, and Japan aimed to catalyse public and private investment in critical mineral supply-chains globally.
- India has signed an agreement with Argentina for lithium exploration through KABIL (Khanij Bidesh India Limited).
- India-Australia has signed the Critical Mineral Investment Partnership for investment in critical mineral projects and for developing supply chains between these two nations.