Critical minerals and mineral security

Detail

1. What are critical minerals?

• Critical minerals are minerals that the economy, clean energy and defence cannot do without, but whose supply is at risk. This topic goes beyond the NCERT chapters.
• Three reasons the supply is 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 vs strategic:

• "Critical" points to supply risk combined with economic importance.
• "Strategic" points to defence and national security use.
• Many minerals fall into both groups.

2. India's list of 30 critical minerals (June 2023)

• On 28 June 2023 the Ministry of Mines released India's first list, "Critical Minerals for India", naming 30 minerals [5][4].
• Examples: lithium, cobalt, nickel, graphite, rare earth elements (REEs), tin, tungsten, germanium, gallium, titanium, vanadium, phosphorus and potash.
• 24 of the 30 are placed in Part D of the First Schedule of the MMDR Act (Mines and Minerals (Development and Regulation) Act, 1957), the part titled "Critical and Strategic Minerals" [4].
• Link to the MMDR Amendment Act, 2023:
• The 2023 amendment allows the Central Government to auction mining leases and composite licences for these Part D minerals.
• It also removed lithium and some other minerals from 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

3. Why India is vulnerable

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

• Even when ore is mined in another country, it is usually processed (refined) in China. China dominates refining of lithium, graphite and rare earths.

• The driver is the energy transition (the shift from fossil fuels to clean energy):

• India wants more EVs, more solar and more wind power → demand for battery and magnet minerals rises sharply → import dependence rises unless India builds domestic supply (link: energy-resources-india).

• The 2025 rare-earth shock (Section 8): in 2025 China tightened export controls on rare earths and rare-earth magnets. This hurt Indian auto and electronics makers. India's response includes a target of 5,000 tonnes of domestic rare earth permanent magnet production capacity by 2030 [11].

4. Domestic finds: Reasi lithium deposit

• Location: Salal-Haimana area, Reasi district, Jammu and Kashmir (UT). It lies in the Chenab valley in the outer Himalayan foothills.
• Finding: the Geological Survey of India (GSI) reported 5.9 million tonnes of inferred lithium resources (G3 stage) in February 2023 [7][8].
• G3 stage means prospecting, an early survey stage. The deposit's size and grade are only roughly estimated.
• The full order of stages is G4 (reconnaissance) → G3 (prospecting) → G2 (general exploration) → G1 (detailed exploration). Mining needs G2 or G1 data.

• GSI did this G3 work in the field seasons 2020-21 and 2021-22 [7].

• Geology: the lithium sits in bauxite-clay horizons, which are layers of aluminium-rich clay in Himalayan rocks.

• This differs from the world's main sources: hard-rock spodumene (Australia) and salt-lake brines (South America).

• Extracting lithium from clay is technically harder and less proven.

• Auction status:

• Early auctions of the Reasi block found no successful bidder.
• Cause: uncertain grade + early (G3) stage → high risk for investors → too few bids.

• GSI is doing more exploration in J&K [8][6].

• Other leads:

• Katghora in Korba district, Chhattisgarh (lithium and rare earths).
• Mandya in Karnataka (lithium in pegmatite, a coarse-grained igneous rock).

5. National Critical Mineral Mission (NCMM)

• NCMM is the Central Government's mission to secure the whole critical-mineral value chain: exploration → mining → processing → recycling.
• Approval: Union Cabinet, 29 January 2025 [2].
• Money: ₹16,300 crore of central spending plus an expected ₹18,000 crore from PSUs and others. That makes a total outlay of ₹34,300 crore [2].
• Period: seven years, 2024-25 to 2030-31 [2].
• Main parts:
• Exploration: GSI is to carry out 1,200 exploration projects between 2024-25 and 2030-31 [2][6].
• Offshore exploration: the target is seabed areas rich in polymetallic nodules. These are potato-sized lumps on the deep-ocean floor that contain cobalt, nickel, manganese and REEs [6].
• Auctions: more than 100 critical-mineral blocks are to be auctioned [6].
• Faster approvals: a fast-track regulatory approval process for critical-mineral mining projects [2].
• Processing parks: dedicated zones with shared facilities for processing critical minerals [2][6].
• Recycling: recovering minerals from e-waste, used batteries and mine tailings (waste left after ore is processed) [2].
• National stockpile: a reserve held in India to absorb supply shocks [2].
• Assets abroad: support for Indian PSUs and private firms to buy mines overseas [2].
• Research: a Centre of Excellence on Critical Minerals [2].

6. Overseas assets: KABIL

• Khanij Bidesh India Limited (KABIL) is a joint venture formed in 2019 by three central PSUs [9]:
• NALCO (National Aluminium Company)
• Hindustan Copper

• MECL (Mineral Exploration and Consultancy Ltd)

• Purpose: to buy critical and strategic mineral assets abroad and keep supply to India steady [9].

• Argentina deal:
• On 15 January 2024, KABIL signed with CAMYEN SE, the state-owned mining company of Catamarca province in north-west Argentina [9].
• The deal covers five lithium brine blocks over 15,703 hectares [9].

• The approved investment is about USD 25.71 million (around ₹200 crore) over 5 years [9].

• "Lithium triangle": the high Andean salt flats (salars) shared by Argentina, Bolivia and Chile. They hold more than half of the world's known lithium resources.

• How brine lithium forms: rain dissolves lithium from volcanic rocks → water drains into closed basins with no outlet → strong sun evaporates the water → lithium-rich brine collects under the salt crust.

• Other countries: KABIL is also looking at assets in Australia (with its Critical Minerals Office) and Chile [9].

7. Partnerships: de-risking supply

• Minerals Security Partnership (MSP):
• A US-led group, launched in 2022, of about 14 countries and the EU.
• India joined in June 2023.

• Aim: build varied, responsible supply chains (good environmental, social and governance standards) so that no single supplier dominates [10].

• Other links:

• the Quad critical minerals initiative (India, US, Japan, Australia)

• bilateral deals with Australia, Chile and Zambia, among others.

• Strategic frame, "de-risking": cut reliance on any one country by doing three things together:

• diversify sources
• build home exploration and processing
• stockpile reserves.

Route	Tool	Example
Domestic supply	exploration and auctions under the MMDR Act and NCMM	Reasi (J&K), Katghora (Chhattisgarh)
Assets abroad	KABIL, PSUs	Catamarca, Argentina
Partnerships	MSP, Quad, bilateral deals	Australia, Chile, Zambia
Circular economy (reusing materials)	recycling and tailings recovery	NCMM recycling component

Prelims Hooks

• India's first critical minerals list (June 2023, Ministry of Mines) names 30 minerals. 24 of them are in Part D, First Schedule, MMDR Act [4].
• Reasi lithium: 5.9 million tonnes, inferred (G3) resource, Salal-Haimana, Reasi district, J&K, announced by GSI in February 2023 [7].
• Exploration stage order, earliest to most detailed: G4 → G3 → G2 → G1.
• NCMM: approved 29 January 2025. Total outlay ₹34,300 crore (₹16,300 crore central + ₹18,000 crore PSUs). Runs 2024-25 to 2030-31 [2].
• NCMM target: 1,200 exploration projects by GSI by 2030-31 [2].
• KABIL = NALCO + Hindustan Copper + MECL (2019). Partner in Argentina: CAMYEN SE, Catamarca [9].
• "Lithium triangle" = Argentina, Bolivia, Chile. Trap: Australia is a top lithium producer but is not part of it.
• Australia mines lithium mainly from hard-rock spodumene. The lithium triangle produces it from brine. Reasi lithium sits in bauxite-clay.
• Polymetallic nodules are seabed lumps containing cobalt, nickel, manganese and REEs. They are part of NCMM's offshore exploration [6].
• India joined the US-led MSP in June 2023.

Mains Points

• Causes of vulnerability (GS-III):
• Few domestic deposits.
• Processing concentrated in China.
• Fast-rising demand from EVs, solar and wind.

• Result: the energy transition could swap oil-import dependence for mineral-import dependence. The 2025 rare-earth export curbs showed this risk.

• Policy response:

• The MMDR Amendment Act 2023 opened critical minerals to central auctions and private exploration.
• NCMM (₹34,300 crore) covers the full value chain, from exploration to recycling and stockpiling.

• KABIL buys assets abroad, and the MSP and Quad add diplomatic support.

• 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.

• Overseas assets carry country risk (political and economic risk in the host country).

• Way forward:

• Upgrade deposits faster from G3 to G2/G1.
• Use processing parks with incentives tied to output.
• Recover minerals from e-waste and tailings.
• Diversify through partnerships rather than "decoupling" (cutting trade ties completely).