Critical minerals

Topic: Mineral Resources of India: Distribution and Conservation · NCERT: Beyond NCERT

Meaning

Critical minerals are minerals that the economy, clean energy and defence cannot do without, but whose supply is at risk. India's Ministry of Mines released its first list of 30 critical minerals on 28 June 2023 [3][2]. They matter because the energy transition (the shift from fossil fuels to clean energy) needs many more of these minerals. If India does not build its own supply, it could swap its dependence on imported oil for a dependence on imported minerals.

Explanation

Why a mineral becomes "critical"

• Two conditions together:
• The mineral is economically important: batteries, magnets, chips, defence and fertilisers need it.

• Its supply is at risk.

• Three reasons the supply can be at risk:

• Scarcity. India has few known deposits, or none that can be mined.
• Geographic concentration. Mining or processing happens in only one or two countries.

• Geopolitics. A supplier country can cut exports, for example through export bans or licences.

• "Critical" and "strategic" are not the same:

• "Critical" means supply risk plus economic importance.
• "Strategic" means use in defence and national security.
• Many minerals belong to both groups.

India's list and its legal link

• The list has 30 minerals (June 2023) [3][2]. Examples are lithium, cobalt, nickel, graphite, rare earth elements (REEs), tin, tungsten, germanium, gallium, titanium, vanadium, phosphorus and potash.
• 24 of the 30 are in Part D of the First Schedule of the MMDR Act (Mines and Minerals (Development and Regulation) Act, 1957). This part is titled "Critical and Strategic Minerals" [2].
• What the MMDR Amendment Act, 2023 changed:
• The Central Government can now auction mining leases and composite licences for Part D minerals.
• Lithium and some other minerals were taken off the "atomic minerals" list, so private firms can now explore for them.

Group	Minerals	Main use
Battery minerals	lithium, cobalt, nickel, graphite, manganese	EV (electric vehicle) and grid-storage batteries
Rare earths	REEs (e.g. neodymium)	permanent magnets in EV motors and wind turbines
Semiconductor minerals	gallium, germanium	chips, solar cells, defence electronics
Strategic metals	tungsten, titanium, vanadium	defence, aerospace, special steel
Fertiliser minerals	phosphorus, potash	food security

Why India is vulnerable

• India imports most of these minerals.
• Lithium, cobalt and nickel come almost entirely from abroad.

• Ore mined in other countries is usually processed (refined) in China. China dominates the refining of lithium, graphite and rare earths.

• The energy transition pushes demand up:

• India wants more EVs, solar power and wind power.
• These need batteries and magnets, so demand for battery and magnet minerals rises sharply.

• Without home supply, India's import dependence rises too.

• The 2025 rare-earth shock:

• In 2025 China tightened export controls on rare earths and rare-earth magnets.
• Indian auto and electronics makers were hurt.
• India responded with a target of 5,000 tonnes of domestic rare earth permanent magnet production capacity by 2030 [9].

How India is securing supply: de-risking

• De-risking means cutting reliance on any one country by doing three things together: diversifying sources, building home exploration and processing, and stockpiling reserves.
• National Critical Mineral Mission (NCMM). It covers the whole value chain: exploration → mining → processing → recycling.
• Approved by the Union Cabinet on 29 January 2025. Total outlay is ₹34,300 crore: ₹16,300 crore from the Centre plus an expected ₹18,000 crore from PSUs and others. It runs for seven years, 2024-25 to 2030-31 [1].
• Exploration: GSI is to carry out 1,200 exploration projects in this period [1][4].
• Offshore exploration: this targets polymetallic nodules, potato-sized lumps on the deep-ocean floor that contain cobalt, nickel, manganese and REEs [4].
• Auctions: more than 100 critical-mineral blocks are to be auctioned [4].
• Other parts are fast-track approvals, processing parks (zones with shared facilities for processing these minerals), recycling from e-waste, used batteries and mine tailings (waste left after ore is processed), a national stockpile, support for buying mines abroad, and a Centre of Excellence on Critical Minerals [1].

Where it occurs

• Reasi, Jammu and Kashmir (UT).
• Location: the Salal-Haimana area of Reasi district, in the Chenab valley in the outer Himalayan foothills.
• In February 2023 the Geological Survey of India (GSI) reported 5.9 million tonnes of inferred lithium resources (G3 stage) [5][6].
• GSI did this G3 work in the field seasons 2020-21 and 2021-22 [5].
• The lithium lies in bauxite-clay horizons (layers of aluminium-rich clay).

• Early auctions found no successful bidder. The grade was uncertain and the stage was early, so investors saw too much risk. GSI is doing more exploration in J&K [6][4].

• Other Indian leads:

• Katghora, Korba district, Chhattisgarh: lithium and rare earths.

• Mandya, Karnataka: lithium in pegmatite (a coarse-grained igneous rock).

• Lithium triangle, South America. These are the high Andean salt flats (salars) shared by Argentina, Bolivia and Chile, which hold more than half of the world's known lithium resources.

• How brine lithium forms:

  • Rain dissolves lithium from volcanic rocks.
  • The water drains into closed basins with no outlet.
  • Strong sun evaporates the water, and lithium-rich brine collects under the salt crust.

• Catamarca, Argentina. On 15 January 2024, KABIL signed a deal with CAMYEN SE, the state mining company of Catamarca province. The deal covers five lithium brine blocks over 15,703 hectares, with an investment of about USD 25.71 million (around ₹200 crore) over 5 years [7].

• KABIL (Khanij Bidesh India Limited) was formed in 2019 by NALCO, Hindustan Copper and MECL. Its job is to buy critical and strategic mineral assets abroad [7].

• KABIL is also looking at assets in Australia and Chile [7].

• Australia. It mines lithium mainly from hard-rock spodumene.

• Partnerships:
• India joined the US-led Minerals Security Partnership (MSP) in June 2023. The MSP was launched in 2022 by about 14 countries and the EU. It aims for varied, responsible supply chains in which no single supplier dominates [8].
• Other links are the Quad critical minerals initiative (India, US, Japan, Australia) and bilateral deals with Australia, Chile and Zambia.

Don't confuse with

• Strategic minerals. These are defined by their defence and national-security use. Critical minerals are defined by supply risk plus economic importance. Many minerals are both.
• Atomic minerals. Under the MMDR Amendment Act, 2023, lithium was removed from the atomic minerals list, which opened its exploration to private firms. Do not call lithium an "atomic mineral" today.
• Inferred (G3) resource vs minable reserve. Reasi's 5.9 million tonnes is only a G3 (prospecting) estimate, so its size and grade are rough. Mining needs G2 or G1 data. The stage order, earliest first, is G4 → G3 → G2 → G1.
• Lithium triangle vs top lithium producers. The triangle is Argentina, Bolivia and Chile, which produce lithium from brine. Australia is a major producer but is not in the triangle. It mines hard-rock spodumene.

Prelims Hooks

• India's first critical minerals list (28 June 2023, Ministry of Mines) has 30 minerals, and 24 of them are in Part D, First Schedule, MMDR Act [3][2].
• Reasi lithium: 5.9 million tonnes, inferred (G3) resource, Salal-Haimana, Reasi district, J&K, announced by GSI in February 2023 [5].
• Lithium host rock matches: Reasi → bauxite-clay; Australia → spodumene; lithium triangle → brine; Mandya (Karnataka) → pegmatite.
• NCMM: approved 29 January 2025; total outlay ₹34,300 crore; runs 2024-25 to 2030-31; GSI target of 1,200 exploration projects [1].
• KABIL = NALCO + Hindustan Copper + MECL (2019). Its Argentina partner is CAMYEN SE, Catamarca [7].
• India joined the US-led MSP in June 2023 [8]. Polymetallic nodules (cobalt, nickel, manganese, REEs) are in NCMM's offshore exploration [4].

Mains Points

• Causes of vulnerability (GS-III):
• India has few domestic deposits, and refining is concentrated in China.
• EVs, solar and wind make demand rise fast.

• So the energy transition could swap oil-import dependence for mineral-import dependence. China's 2025 rare-earth export curbs showed this risk, and India has set a target of 5,000 tonnes of magnet capacity by 2030 [9].

• Policy response:

• The MMDR Amendment Act, 2023 opened Part D minerals to central auctions and private exploration.
• NCMM (₹34,300 crore) covers the full chain: exploration, offshore nodules, processing parks, recycling and a national stockpile [1].

• KABIL buys assets abroad, such as in Catamarca, Argentina [7]. The MSP and the Quad add diplomatic support.

• Limits and way forward:

• Limits: early-stage deposits like Reasi (G3) put off bidders. India has weak processing technology and too few trained people. Mining in the Himalayas and in tribal belts raises environmental and social concerns. Mines abroad carry country risk (political and economic risk in the host country).
• Way forward: move deposits faster from G3 to G2/G1. Give processing parks incentives tied to output. Recover minerals from e-waste and tailings. Diversify through partnerships instead of "decoupling" (cutting trade ties completely).

Related concepts

• Reasi lithium deposit
• National Critical Mineral Mission
• Khanij Bidesh India Limited
• Mineral Security Partnership

Read more

• Critical minerals and mineral security