Recent initiatives with major economies to promote investment across the critical mineral value chain and collaboration in research and development have the potential to further push India’s journey towards a sustainable future
The world is going through a tremendous geopolitical churn and the path towards a clean and sustainable future is riddled with challenges. Although India’s target to foster a sustainable transportation ecosystem, focussing primarily on promoting electric mobility remains central, the government has also been quick to recognise the need to reduce its dependence on other countries for critical minerals, an essential component driving the country’s clean mobility journey.
While the Union Budget presented recently by Finance Minister Nirmala Sitharaman provides a clear vision to plug India’s supply chain vulnerabilities by further boosting the ‘Make In India’ vision in the current geopolitical context, recent initiatives by the Indian government in securing these rare earth minerals in collaboration with other countries are aimed at further boosting resilience, ratcheting up local manufacturing and scaling up adoption of clean solutions.
India’s recent initiatives with other countries to accelerate collaboration in research and development and promote investment across the entire critical mineral value chain have the potential to further push India’s journey towards a sustainable future and become a leader in the volatile landscape. Let us take a look at some of the recent crucial initiatives and partnerships inked with major economies globally.
Fig 1: A view of the MP Materials rare earth open-pit mine in Mountain Pass, California, U.S. January 30, 2020. REUTERS/Steve Marcus/File Photo
Boosting Critical Mineral Supply Through Global Partnerships
Prime Minister Narendra Modi recently concluded his US trip where he held high-level bilateral talks with President Donald Trump on a wide range of subjects, including trade and technology, defence and security, energy and people-to-people ties. One of the crucial initiatives that was launched by both the leaders was the U.S.-India TRUST ("Transforming the Relationship Utilizing Strategic Technology”) initiative, aimed at catalysing collaboration to promote application of critical and emerging technologies.
As part of the TRUST initiative, both the leaders pledged to build trusted and resilient supply chains, including for semiconductors, critical minerals, advanced materials and pharmaceuticals. Recognizing the strategic importance of critical minerals for emerging technologies and advanced manufacturing, both the countries also decided to accelerate collaboration in research and development and promote investment across the entire critical mineral value chain, as well as through the Mineral Security Partnership, of which both the United States and India are members.
“Both countries have committed to intensifying efforts to deepen cooperation in the exploration, beneficiation, and processing as well as recycling technologies of critical minerals. To this end, the leaders announced the launch of the Strategic Mineral Recovery initiative, a new U.S.-India program to recover and process critical minerals (including lithium, cobalt, and rare earths) from heavy industries like aluminum, coal mining and oil and gas,” an official document read.
Industry pundits believe that the launch of this initiative will give a major boost to India National Critical Mineral Mission, which encourages public and private companies to pursue and acquire critical minerals abroad.
India also inked a pact with Argentina recently for deeper collaboration in exploration and resource development of critical minerals, particularly lithium. Both the nations also discussed expanding cooperation in the mining sector, particularly in lithium exploration and investment opportunities.
“Argentina is a crucial partner for India in securing essential minerals required for electric vehicle batteries and renewable energy storage. The discussions covered ongoing lithium exploration efforts by Khanij Bidesh India Ltd. (KABIL) and Greenko in Catamarca and the possibilities of increasing participation of Indian companies in mining projects of Argentina. Both sides explored avenues for investment, long-term supply agreements, and joint ventures that would help strengthen India's access to this critical mineral,” an official statement said.
And that is not all. During his visit to India, President of Indonesia, H.E. Mr. Prabowo Subianto held wide ranging talks on decarbonisation of the transport and other relevant sectors, focussing on collaborations with India. “Both sides (India-Indonesia) have shown interest in joint exploration and mining related projects, particularly relating to critical minerals such as nickel, bauxite, silica, tin etc. with a focus on the downstream sectors,” an official statement said.
India’s vision for a ‘Viksit Bharat’ and achieving net-zero by 2070 prioritizes the twin pillars of technology and innovation coupled with sustainable growth keeping in mind its developmental priorities. These international collaborations and initiatives make it clear that securing the supply chain to enable local manufacturing remains critical to India in its journey towards a green future.
Fig 2: A worker of Sigma Lithium Corp SGML.V takes samples at the Grota do Cirilo mine in Itinga, in Minas Gerais state, Brazil April 18, 2023.
Securing Critical Minerals: Importance Of Global Partnerships
As the world transitions to clean energy sources like e-mobility and renewable energy, the role of critical minerals becomes all the more critical. It is further complicated by the fact that critical mineral reserves are concentrated in very few geographies on earth.
The “lithium triangle” of Chile, Argentina and the salt flats of Bolivia holds 56% of all known lithium deposits, while 7.9% falls within China. Cobalt is another highly sought-after metal that’s used in EV batteries, and 70% of it is mined by the Democratic Republic of Congo. EV batteries also depend on a combination of several rare earth metals, such as Ruthenium, Chromium and Iridium.
However, China at the moment accounts for around 70% of the world’s rare earth minerals supplies, while North Korea is reported to have $10 trillion worth of minerals and two thirds of the world’s rare earths. Yet, due to its political isolation, it may be difficult to bring the deposits to the global supply chain.
According to the IEA’s Critical Minerals Outlook 2024, most of the major economies across the world have put in place “high-level” critical mineral strategies, driven mostly by their pledges to transition fast towards clean and sustainable energy sources. However, in other nations, mostly emerging economies, these strategies are either under development or have been announced, it said.
In this context, India’s pacts with both the US and Argentina becomes crucial. India has already joined the Minerals Security Partnership, or MSP, a US-led alliance of 14 developed economies aimed at ensuring uninterrupted supply of critical minerals and rare earth essential for sustained economic growth. This has been hailed by the industry as a “great strategic step in the right direction” which will allow India access to critical technologies and investments to transform its transport sector and boost manufacturing.
Steps Taken Domestically By India To Boost Critical Mineral Supply
To support domestic manufacturing and value addition, the Union Budget this year announced full exemption of Basic Custom Duty (BCD) on cobalt powder and waste, scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals. This comes on the back of the government's announcement of exempting BCD on 25 critical minerals, that were not domestically available, in July 2024.
Recently the government approved the launch of the National Critical Mineral Mission (NCMM) with an expenditure of Rs.16,300 crore and expected investment of Rs.18,000 crore by PSUs, etc.
Sitharaman had announced the setting up of the Mission in the Union Budget for 2024-25. The NCMM will encompass all stages of the value chain, including mineral exploration, mining, beneficiation, processing, and recovery from end-of-life products.
The Finance Minister also announced that mining sector reforms, including those for minor minerals, will be encouraged through sharing of best practices while a policy for recovery of critical minerals from tailings will be brought out. At the same time, the ministry of mines recently reclassified Barytes, Felspar, Mica, and Quartz from minor minerals to major minerals. Quartz, Felspar, and Mica are present in pegmatite rocks, which contain Beryl, Lithium, Niobium, Tantalum, Tin, Titanium and Tungsten, minerals crucial for energy transition and space industries.
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