Securing India’s Critical Minerals
Context:
India continues to face significant challenges in developing and securing critical mineral resources, highlighting the urgent need for regulatory reforms and a reassessment of the auction mechanism for mine allocation.
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- A recent study by the Centre for Social and Economic Progress (CSEP) underscores these concerns, emphasising the importance of streamlining mining policies and encouraging global participation.
Government’s Push for Critical Mineral Security
- Recognising the growing importance of critical minerals, the Indian government recently approved a ₹34,300 crore outlay over seven years for the National Critical Minerals Mission.
- The mission aims to secure essential mineral resources by offering financial incentives for exploration and expediting regulatory approvals.
- Unlike in the past, critical minerals are now among the most sought-after resources globally, as nations rush to explore and develop their reserves.
- These minerals are crucial for green technologies, including electric vehicles, renewable energy, and advanced electronics.
India’s Dependence on Imports
- Despite possessing potential critical mineral resources, India has yet to convert them into economically viable mining reserves.
- Currently, the country is 100% import-dependent for five key minerals essential for green technologies: Cobalt, Lithium, Nickel, Rare Earth Elements (REEs) and Silicon.
- This heavy reliance on imports poses risks to India’s energy transition, industrial growth, and national security.
Challenges and Policy Recommendations
The CSEP study identifies multiple obstacles in India’s current approach to critical mineral exploration and extraction. It suggests several policy interventions to address these challenges:
- Amend the Mines and Minerals (Development and Regulation) Act: The study calls for streamlining the mining lease approval process and increasing private sector participation in mineral exploration.
- It suggests granting exploration companies the right to mine the minerals they discover, incentivising further exploration efforts.
- Attracting Global Expertise: India should invite global mining companies with proven expertise to participate in its critical mineral projects.
- Currently, many auction processes for mine allocation have failed due to a lack of technically qualified bidders.
- Increased Investment in Exploration and R&D: India needs significant investments in exploration activities, advanced mining technologies, and research & development (R&D) to unlock its mineral potential.
As global demand for critical minerals intensifies, India must take decisive steps to reduce its dependency on imports and secure domestic resources. By reforming mining regulations, encouraging foreign participation, and investing in exploration, India can strengthen its position in the global mineral supply chain and support its transition towards a green and self-reliant future.
