UPSC Prelims 2025 Q6: Critical Minerals, MSP & MMDR Act — Explained

Consider the following statements:

I. India has joined the Minerals Security Partnership as a member.

II. India is a resource-rich country in all the 30 critical minerals that it has identified.

III. The Parliament in 2023 has amended the Mines and Minerals (Development and Regulation) Act, 1957 empowering the Central Government to exclusively auction mining lease and composite license for certain critical minerals.

Which of the statements given above are correct?

  1. I and II only
  2. II and III only
  3. I and III only
  4. I, II and III

Answer: (c) I and III only

Statement-wise explanation

  • I: correct — The US launched the Minerals Security Partnership (MSP) in June 2022 to secure supply chains for critical minerals. India joined in June 2023 as its 14th member. The Ministry of Mines' Year End Review 2023 records that India became an MSP member and that the Secretary (Mines) led India's delegation to the MSP Principals' Meeting in London on 10 October 2023.
  • II: incorrect — In June 2023 the Ministry of Mines named 30 critical minerals because their supply to India is at risk. Many of them are minerals India has little or none of. India is fully import-dependent for lithium, cobalt and nickel, and also for others on the list such as vanadium, niobium, germanium, rhenium, beryllium, tantalum and strontium. The word 'all' makes the statement false.
  • III: correct — The MMDR Amendment Act, 2023 passed the Lok Sabha on 28 July 2023 and the Rajya Sabha on 2 August 2023. It allows only the Central Government to auction mining leases and composite licences for the 24 critical and strategic minerals in the new Part D of the First Schedule, such as lithium, cobalt, nickel, graphite, tin and potash. The States still issue the leases, and the auction revenue goes to the States.

How to eliminate

Statement II says 'all the 30 critical minerals'. A mineral counts as 'critical' because its supply is at risk, often because a country has to import it. A country rich in every one of its critical minerals would have little reason to make such a list. Most aspirants also know India imports almost all its lithium, cobalt and nickel. That rules out Statement II. Once II is out, three options go, because each of them includes II. Only 'I and III only' is left, so you do not need to be sure about I or III. Facts to remember anyway: India joined the US-led MSP in June 2023 as its 14th member. The MMDR Amendment Act, 2023 lets the Centre auction 24 Part D critical minerals.

Know more

Critical minerals are minerals that clean energy, electronics, defence and the wider economy cannot do without, but whose supply is at risk. The risk comes from scarce domestic reserves or from mining and refining being concentrated in a few countries. China refines most of the world's rare earths, graphite, gallium and germanium.

India's response works at three levels:

Level Instrument Key facts
Identification List of 30 Critical Minerals (June 2023) Includes lithium, cobalt, nickel, graphite, REE, PGE, tungsten, vanadium, potash and phosphorus
Domestic law MMDR Amendment Act, 2023 Centre auctions mining leases and composite licences for 24 Part D minerals; 6 minerals removed from the reserved 'atomic' list (beryl/beryllium, lithium, niobium, titanium, tantalum, zirconium); new exploration licence for 29 deep-seated minerals in the Seventh Schedule
Mission National Critical Mineral Mission (2024-25 to 2030-31) Covers exploration, mining, processing, recycling and buying mineral assets abroad
Overseas assets KABIL (NALCO, HCL and MECL joint venture) Buys lithium and cobalt assets abroad, for example in Argentina
Partnerships Minerals Security Partnership (US-led, 2022) India joined in June 2023 as the 14th member

Why the 2023 law mattered: Before 2023, the States auctioned all major mineral blocks. They had little interest in deep-seated or low-grade critical minerals. Lithium, titanium and the other reserved minerals could only be mined by government entities. The amendment opened these minerals to private bidders. It also gave the Centre the power to run the auctions, while the revenue still goes to the States. After the Act, the Centre held repeated tranches of critical-mineral block auctions.

Exam angle: Expect questions on who auctions which minerals (Centre or State), how many minerals are on the list (30) or in Part D (24), what the MSP is and who belongs to it, and where deposits are found, such as lithium in Reasi, J&K.

In the news

Three critical-minerals moves came within weeks of each other in mid-2023. India published its first list of 30 critical minerals and joined the Minerals Security Partnership, both in June 2023. Parliament then passed the MMDR Amendment Act in August 2023. The Centre's tranches of critical-mineral auctions and the launch of the National Critical Mineral Mission in early 2025 kept the topic in the news until the 2025 Prelims.

NCERT Concepts to Revise

  • Mineral Security Partnership: Statement I is about this US-led grouping, so you need to know who leads it and who its members are.
  • MMDR Amendment Act 2023: Statement III depends on what the 2023 amendment changed about who auctions mining leases and composite licences.
  • Critical minerals: Statement II depends on what makes a mineral 'critical' and why a country draws up such a list.
  • China's dominance in critical minerals: Explains why countries, India included, worry about supply risk for the minerals on the list in Statement II.
  • Reasi lithium deposit: The best-known Indian find of one listed mineral, useful when judging how much of the 30 minerals India actually has.
  • National Critical Mineral Mission: The 2025 mission built on the 2023 list and law, which links the facts tested in Statements II and III.

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