The Indian government’s initiative to explore critical minerals, involving 125 new projects, marks a significant strategic move to bolster the country’s self-reliance in this crucial sector. These minerals, indispensable for various sectors including renewable energy, defense, and agriculture, are currently in high demand and largely met through imports.
Historically, India has depended entirely on imports for minerals like lithium, nickel, cobalt, and copper, which are essential for its transition to clean energy in sectors such as power and transport. Recognizing the importance of these minerals, the government announced its first policy on critical minerals in June this year and proposed amendments to key legislations to allow private sector involvement in their exploration and mining. This shift is aimed at increasing domestic supply and reducing import dependency.
In June, the government identified 30 critical minerals, including lithium, cobalt, nickel, graphite, tin, and copper. These are vital for India’s clean energy transition, particularly in the context of its commitment to lowering carbon emissions globally. The country currently mines some minerals required for clean energy technologies like iron ore, chromium, bauxite, aluminium, zinc, lead, and manganese. However, the supply of crucial minerals, now identified as critical, is lacking. Access to these minerals is essential for large-scale production of clean energy technologies such as solar panels, wind turbines, utility-scale battery storage, and electric vehicle batteries.
According to the International Energy Agency (IEA), manufacturing batteries requires a high usage of minerals like copper, nickel, lithium, cobalt, and rare earth elements, while the usage of other minerals like zinc, chromium, and aluminium is very low. As India targets fulfilling half of its energy needs through the renewable sector by 2030, the demand for battery storage, used intermittently to stabilize the grid, has become increasingly important.
At least one-third of the 30 identified critical minerals are currently 100% import-driven. These include tantalum, germanium, strontium, rhenium, and tellurium, used in manufacturing solar PV modules and other clean energy technologies. The critical mineral policy aims to provide necessary support, coordinate with other ministries and departments, and frame policies and incentive schemes to create a complete value chain of critical minerals in India. The government may also collaborate with international agencies for the strategic acquisition of foreign assets on critical minerals.
The National Institute of Centre of Excellence on critical minerals has been proposed to identify more efficient ways for discovering next-generation critical mineral deposits and to deepen local exploration. The Geological Survey of India (GSI) will undertake 122 exploration projects in the current fiscal year, focusing on minerals like lithium, which have recently been discovered and are crucial for commercial production.
The Ministry of Mines has proposed amendments to the Mines and Minerals (Development and Regulation) Act, 1957, introducing an exploration license for deep-seated and critical minerals. This license will allow the licensee to undertake reconnaissance and prospecting operations for these minerals. The blocks explored will be auctioned for mining leases within a prescribed timeline, and the exploration agency will be entitled to a share in the auction premium payable by the mining lease holder. This proposed exploration license is intended to facilitate, encourage, and incentivize private sector participation in the exploration of critical and deep-seated minerals.
In summary, the Indian government’s initiative to explore critical minerals is a strategic step towards reducing import dependency, fostering self-reliance, and supporting the country’s clean energy transition. The involvement of private players, along with government agencies, is expected to significantly boost the exploration and mining of these critical minerals.