UPSC Prelims Practice Questions — Cabinet Approves Capex Support Scheme to Promote Critical Mineral Processing with an Outlay of Rs.2,814 Crore for Lithium and Nickel processing

Q1. Consider the following activities in the lithium-ion battery supply chain and the value-chain stage each is paired with: Which of the pairs given above is/are correctly matched?

  1. Exploration of lithium brine blocks : Upstream
  2. Converting ore or intermediates into high-purity lithium compounds : Midstream
  3. Manufacturing advanced chemistry battery cells : Downstream
  4. Recovering cobalt while refining nickel intermediates : Upstream
  • A. 1, 2 and 3 only
  • B. 2, 3 and 4 only
  • C. 1, 2, 3 and 4
  • D. 1 and 2 only

Q2. India wishes to reduce its dependence on imported high-purity lithium and nickel compounds. Consider the following measures: Which of the measures given above would directly contribute to this objective?

  1. Building domestic plants that convert ore or intermediates into high-purity lithium and nickel compounds
  2. Extracting lithium and nickel within India from spent lithium-ion batteries and e-waste
  3. Expanding domestic battery-cell manufacturing while sourcing all cathode-grade materials from abroad
  • A. 1, 2 and 3
  • B. 1 only
  • C. 1 and 2 only
  • D. 2 and 3 only

Q3. Under the Capex Support Scheme for lithium and nickel processing, technically qualified bidders compete in a financial bid, and the bidder seeking the lowest capital support is selected. What is the main economic rationale of this design?

  • A. It selects the project with the least total investment cost, whatever support is sought.
  • B. It makes firms reveal the least support they need, minimising public outlay per project.
  • C. It ensures support is released only after the refined output is sold in the market.
  • D. It ensures that bidders proposing larger plants receive a higher share as support.

Q4. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. Expanding domestic nickel refining capacity can also add to the domestic availability of cobalt.
  2. The vast majority of the world's cobalt is produced as a by-product of copper and/or nickel production rather than from cobalt-only mines.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q5. Consider the following assertion: 'Secondary sourcing can add to India's supply of critical minerals while reducing the need for fresh mining.' Which of the following statements support/supports the above assertion?

  1. E-waste, lithium-ion battery scrap and catalytic converters from end-of-life vehicles contain critical minerals that can be separated and recovered.
  2. Pilot projects under the National Critical Mineral Mission seek to recover critical minerals from overburden, tailings, fly ash and red mud.
  3. Under the processing capex scheme, cobalt is recovered as a by-product while refining nickel intermediates.
  4. The recycling incentive scheme is expected to yield about 40 kilotonnes of critical minerals annually from recycling capacity created in India.
  • A. 2, 3 and 4 only
  • B. 1, 2, 3 and 4
  • C. 1 and 2 only
  • D. 1, 2 and 4 only