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Context:  Centre declared the winning bidders for mining rights in six blocks of critical minerals.

Details

Critical Minerals

• Critical minerals are those minerals that are essential for economic development and national security. The lack of availability of these minerals or concentration of extraction or processing in a few geographical locations may lead to supply chain vulnerabilities and even disruption of supplies.

Critical Minerals

Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, PGE, Phosphorous, Potash, REE, Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium and Cadmium.

Significance of Critical Minerals

Economic growth: 

• Cobalt, nickel, and lithium are important for the telecommunication industry, manufacturing of electric vehicle batteries etc. 
• As per the International Energy Agency (IEA), lithium demand rose by 30% in 2023, followed by nickel, cobalt, graphite and rare earth elements which saw an 8% to 15% growth.
• Value of such minerals pegged at $325 billion.

Clean energy:

• Rare Earth Elements are critical for green technologies like semiconductors, solar panels and wind turbines etc.
• By 2040, the demand for copper is expected to rise 50%, double for nickel, cobalt and rare earth elements, quadruple for graphite and eightfold for lithium, which is crucial for batteries.
• World’s goal to limit global warming to 5 degrees Celsius in the net zero emissions scenario, would translate into very rapid growth in demand for these minerals

National Security and Defense: 

• Cobalt is used in military technologies like smart bombs, aircraft, and precision-guided missiles.

Concerns

• Concentration of extraction or processing in a few geographical locations could lead to supply chain vulnerabilities.
• For instance, the Lithium triangle consists of Argentina, Chile, and Bolivia.
• Australia has 55% of lithium reserves, China has 60% of the rare earths, Democratic Republic of Congo (DRC) has 75% of cobalt, Indonesia has 35% of nickel, Chile has 30% of copper reserves.
• When it comes to processing, China processes 35% of the world’s nickel, 50% to 70% of the lithium and cobalt, and nearly 90% of the rare earths.
• China has also monopolised the manufacture of finished products as it supplies 78% of the cathodes, 85% of the anodes, 70% of the battery cells, and 95% of the permanent magnets made from rare earths.
• Supply-chain and national security concernsare increasingly shaping critical mineral sector policies for ex-European Union’s Critical Raw Materials Act (2024).
• Unsustainable Miningand processing.

India’s Scenario

• India relies on imports for its silver, and cobalt needs, predominantly sourced from China.
• In India, the lack of ready reserves of critical minerals has resulted in 100% import dependence for minerals like lithium, cobalt, and nickel.

India is 100% import dependent for certain elements.

Critical Minerals in India

• India holds 11% of the world’s deposits of ilmenite, the main source of titanium dioxide.
• Discovery of lithium reserves in Jammu and Kashmir (J&K), these reserves were pegged at 5.9 million tonnes.
• Odisha Block: The inferred value is 3,908 tonnes of nickel metal content or 2.05 million tonnes of nickel ore.
• India has substantial graphite reserves, primarily in Madhya Pradesh, Jharkhand, and Odisha, making it a potential key player in the global graphite market.
• P. (phosphorite and rare earth elements), Karnataka (phosphate and nickel), and Rajasthan (potash and halite)
• Tungsten reserve in Tamil Nadu’s Madurai district.
• Cobalt and manganese in Karnataka’s Shimoga.
• Chromium and nickel block in Sindhudurg, Maharashtra.

Challenges faced by India in Critical Mineral exploration and production.

• India has limited domestic reserves of critical minerals such as lithium, cobalt, and other rare earth elements.
• low interest among miners for some of these blocks include the lack of adequate data on the potential reserves buried within them.
• Technology challenges also affect outcomes.
• For instance, the lithium block in J&K has clay deposits, and the technology for the mineral’s extraction from clay remains untested globally

Initiatives taken with respect to Critical Minerals

• India- Australia Critical Minerals Investment Partnership.
• India has joined Minerals Security Partnership that aims to catalyse public and private investment in critical mineral supply chains
• Khanij Bidesh India Ltd. (KABIL), mandated to identify and acquire overseas mineral assets of critical and strategic nature like lithium, cobalt etc.
• For lithium brine, was acquired in Argentina this year by Khanij Bidesh India Limited, a joint venture of NALCO, Hindustan Copper, and Mineral Exploration Company.
• Mineral Security Partnership (MSP): India has become  member of MSP led by the US to accelerate the development of diverse and sustainable critical energy minerals supply chains globally
• Mines and Minerals (Development and Regulation) Amendment Act, 2023:Central Government to auction areas for Critical and strategic minerals.

Conclusion

India has an opportunity to strengthen its international cooperation and partnerships through the strategic management of critical minerals. Bilateral agreements with countries such as Australia, Canada, Japan and USA.

More: https://www.iasgyan.in/daily-current-affairs/critical-and-strategic-minerals

And: https://www.iasgyan.in/daily-current-affairs/rare-earth-metals-6#:~:text=The%2017%20Rare%20Earths%20are,%2C%20and%20yttrium%20(Y).

Rare Earth Elements:  https://www.iasgyan.in/daily-current-affairs/rare-earth-elements

Sources:

TheHindu, Ministry of Mines, PIB

PRACTICE QUESTION Q. What are rare earth materials? Discuss their strategic and environmental significance. 150 words.