Imperative for India to formulate national resourcing strategy for critical minerals

What are critical minerals?

  • A critical mineral is a metallic or non-metallic element that has two characteristics: It is essential for the functioning of our modern technologies, economies or national security and. There is a risk that its supply chains could be disrupted.
  • But these supply risks exist due to rare availability, growing demand and complex processing value chain. Many times the complex supply chain can be disrupted by hostile regimes, or due to politically unstable regions.
  • Based on their individual needs and strategic considerations, different countries create their own lists.
  • However, such lists mostly include graphite, lithium and cobalt.


  • These minerals are now used everywhere from making mobile phones, computers, batteries, electric vehicles and green technologies like solar panels and wind turbines.
  • Aerospace, communications and defence industries also rely on several such minerals as they are used in manufacturing fighter jets, drones, radio sets and other critical equipment.

Global distribution:


  • According to the 2019 USGS Mineral Commodity Summaries report, China is the world’s largest producer of 16 critical minerals.
  • China, according to a report on the role of critical minerals by the International Energy Agency, is “responsible for some 70% and 60% of global production of cobalt and rare earth elements, respectively, in 2019. 
  • The level of concentration is even higher for processing operations, where China has a strong presence across the board. China’s share of refining is around 35% for nickel, 50-70% for lithium and cobalt, and nearly 90% for rare earth elements.”
  • It also controls cobalt mines in the Democratic Republic of Congo, from where 70% of this mineral is sourced.

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Indian steps in this regard:

  • India has set up KABIL or the Khanij Bidesh India Limited, a joint venture of three public sector companies, to “ensure a consistent supply of critical and strategic minerals to the Indian domestic market”
  • Indo- Australia partnership

What are rare Earth Elements?

  • Rare Earth Elements or Rare Earth Metals are a set of 17 chemical elements in the periodic table — the 15 lanthanides, plus scandium and yttrium, which tend to occur in the same ore deposits as the lanthanides, and have similar chemical properties.
  • The 17 Rare Earths are cerium (Ce), dysprosium (Dy), erbium (Er), europium (Eu), gadolinium (Gd), holmium (Ho), lanthanum (La), lutetium (Lu), neodymium (Nd), praseodymium (Pr), promethium (Pm), samarium (Sm), scandium (Sc), terbium (Tb), thulium (Tm), ytterbium (Yb), and yttrium (Y).
  • Despite their classification, most of these elements are not really “rare”. One of the Rare Earths, promethium, is radioactive.Although originally thought to be rare, many of the minerals are actually common in the Earth’s crust.  However, due to the difficulties in extracting the metal from the ore, rare is a fitting term. These elements rarely exist in pure form; they are usually found within other minerals, making them costly to mine.
  • These elements are important in technologies of consumer electronics, computers and networks, communications, clean energy, advanced transportation, healthcare, environmental mitigation, and national defence, among others.
  • Scandium is used in televisions and fluorescent lamps, and yttrium is used in drugs to treat rheumatoid arthritis and cancer.
  • Rare Earth elements are used in space shuttle components, jet engine turbines, and drones. Cerium, the most abundant Rare Earth element, is essential to NASA’s Space Shuttle Programme.


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  • Examining the available data, it is found that China consumes around 104,000 metric tons (MT) of rare earth, which is 67 per cent of the total consumption worldwide.  
  • China is followed by Japan, the US, and the EU with 16 per cent, 13 per cent and four per cent respectively.
  • Data further suggest China controls about 90 percent of global production of rare earth metal while it possesses only 36 percent of the global reserve of this rare metal

India has the 5th largest reservoir and recognised the importance of rare earth back in 1950 and started extracting rare minerals through the establishment of the Indian Rare Earth Limited. India could not, however, make progress in this sector due to several reasons.

Why did India fail?

  • Lack of separate guiding policy to expand the production of rare earth.
  • The Indian rare earth industry keeps on operating on the downstream production process only. 
  • Associated risks
  • High level of technology is required.  
  • failure to promote entrepreneurship in this sector
  • Foreign investors have always kept a distance from this sector. This is mainly because the sector was reserved for the public sector.
  • Stiff competition from China-> Easy to import at much lower prices.

In 2016, a study, supported by the Indian government’s Department of Science and Technology (DST), provides a framework for India to assess the impact of critical minerals including rare earth in the manufacturing sector, considering both economic importance and associated supply risks. The study argues the development of this mineral will also give a fillip to India’s ambitious Make in India plan by enhancing the volume of rare earth production.

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