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Mineral Geopolitics
Context:
The pursuit of minerals and resources has historically shaped global geopolitics, driving colonial expansion and modern international relations, with the 20th century dominated by oil and gas geopolitics, while the 21st century shifts toward critical minerals crucial for the clean energy transition. However, India’s approach to mineral geopolitics remains weak compared to global powers like the US and China.
Global Approaches to Mineral Geopolitics
- Western Approach: Resource Extraction from the Global South
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- The US and Western Europe prefer to source lithium, cobalt, and rare earths from Africa and Latin America instead of exploiting their own reserves.
- Their aim is to minimise environmental damage within their borders while securing essential minerals.
- The US, despite having substantial lithium reserves, remains hesitant to extract due to environmental concerns.
- Foreign aid and strategic alliances play a role, as seen in US-Ukraine mineral agreements.
- Chinese Approach: Self-Sufficiency and Supply Chain Control
- China aggressively secures mineral access by exploiting domestic reserves and securing long-term agreements globally.
- It has dominated cobalt mining in the Democratic Republic of Congo (DRC) and established control over rare earth supply chains.
- China has the largest processing capacities for lithium and other critical minerals, ensuring strategic dominance.
- India’s Approach: Sporadic and Inconsistent Efforts
- Limited global engagement in securing critical minerals due to fragmented efforts.
- Unlike China, India has not aggressively pursued mining rights, long-term agreements, or mineral processing.
- Domestic exploration and processing constraints exist due to regulatory hurdles, lack of surveys, and low private investment.
- Heavy dependence on China for rare earth elements (REEs) weakens India’s clean energy transition.
Challenges Hindering India’s Mineral Geopolitics
- Policy and Regulatory Constraints: Bureaucratic delays and regulatory bottlenecks slow down exploration and extraction.
- Absence of clear policy incentives discourages private sector investment.
- Lack of Domestic Exploration: India’s mineral reserves remain largely unexplored due to limited surveys and outdated mining technologies.
- Dependence on China for Critical Minerals: India heavily relies on China for rare earths and battery components, making supply chains vulnerable.
- Limited Investment in Processing and Refining: Lack of processing infrastructure forces India to depend on imported refined minerals.
- High capital costs and environmental concerns deter investment in refining.
- Strategic Inertia in Securing International Agreements: India has not aggressively pursued long-term mineral agreements, exposing it to supply chain disruptions.
Steps Taken by the Indian Government to Develop the Critical Mineral Industry
- Critical Mineral Mission: The Critical Mineral Mission aims to expand domestic production, prioritise recycling, and incentivise overseas asset acquisition.
- Legislative Changes: The Mines and Minerals (Development and Regulation) Amendment Bill, 2023 allows private sector exploration of six critical minerals.
- Overseas Acquisitions: KABIL, a joint venture of public sector firms, signed its first lithium mining deal in Argentina in January 2024.
- International Collaborations: India has joined the Mineral Security Partnership (MSP), led by the United States, to enhance cooperation in securing supply chains of critical minerals.
- Collaborating with Australia, Chile, Argentina, and Bolivia to secure access to critical mineral resources.
- Customs Duty Exemptions: In the Union Budget 2024-25, the government removed customs duties on 25 critical minerals to promote domestic manufacturing and reduce import dependency.
- Centre of Excellence on Critical Minerals (CECM): The Ministry of Mines formed a committee to identify critical minerals and proposed a Centre of Excellence on Critical Minerals (CECM) to update the list every three years.
- Of 30 identified critical minerals, 24 are included in the MMDR Act.
- S&T-PRISM Initiative for Critical Mineral Extraction: Under the Science and Technology Programme, the Ministry of Mines offers grants for research and innovation in mining, mineral processing, metallurgy, and recycling.
- The S&T-PRISM initiative focuses on extracting strategic and critical minerals at the elemental level to support India’s technological and industrial needs.
The Way Forward: A Strategic Approach for India
- Strengthening Domestic Exploration and Mining: Increase funding for mineral exploration through public-private partnerships (PPPs).
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- Conduct comprehensive geological surveys to map lithium, nickel, cobalt, and rare earth reserves.
- Enhancing Processing and Refining Capabilities: Invest in domestic processing infrastructure to reduce import dependence.
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- Encourage R&D in clean and efficient mineral processing technologies.
- Strengthening International Engagement and Supply Chain Security: Develop long-term bilateral agreements with resource-rich nations.
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- Join and actively participate in global critical mineral alliances.
- Establish strategic stockpiles to mitigate supply chain risks.
- Reducing Dependence on China: Diversify import sources for rare earths and lithium-ion battery components.
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- Strengthen manufacturing capacities for EV batteries and renewable energy components.
- Policy and Institutional Reforms: Establish a National Critical Minerals Authority to oversee exploration, agreements, and processing initiatives.
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- Formulate a National Mineral Security Policy aligned with India’s clean energy goals.
This strategic approach can help India achieve self-sufficiency, supply chain security, and leadership in clean energy transition.
