Critical minerals and India’s path towards a sustainable future

New Delhi: Collective action is important to achieve our targets and government is actively forming new partnerships and alliances related to critical minerals

BY | Saturday, 9 September, 2023

Pralhad Joshi is the Union Minister of Coal, Mines and Parliamentary Affairs, Government of India

As we approach the G20 Leaders’ Summit in New Delhi, there is a growing consensus on the importance of critical minerals for the clean energy transition. The outcome document of the G20 Energy Transitions Ministers’ Meeting in Goa notes the “need to maintain reliable, responsible and sustainable supply chains of such critical minerals and materials”. Minerals that have important uses and no viable substitutes but are important to a nation’s economic and national security are often defined as critical minerals. Critical minerals such as cobalt, lithium, silicon, graphite, and rare earth elements (REE) are used in clean technologies like solar modules, wind turbines, and batteries. The deployment of these technologies can help meet India’s sustainability targets of 500 GW of non-fossil power capacity by 2030 and an emissions-intensity target of 45% below 2005 levels by 2030. Therefore, these minerals are essential for economic development and national security and can be termed as building blocks of modern civilization.

The growing demand for clean technologies has led to an uptick in global mining of various critical minerals. According to a study conducted by Ministry in collaboration with the Council on Energy, Environment and Water (CEEW), between 2016 and 2022, there has been an increase in the annual production of key minerals such as lithium, REE, and cobalt of 240 per cent, 134 per cent, and 67 per cent respectively. In the case of minerals such as cobalt, copper, and nickel, current mine production is already more than 2 per cent of global reserves. However, the global supply chains of critical minerals are complex and can be vulnerable to unforeseen disruptions, such as trade concerns, geo-political factors, and natural disasters. Securing the supply chain of critical minerals is important for reducing our import dependence, strengthening national security, and developing a domestic value chain to cater to the growing demand.

To further the vision of Aatmanirbhar Bharat, government under the leadership of Prime Minister is committed to the growth of the domestic critical minerals sector with a focus on exploration, processing, use, and recycling. Policy reforms have been undertaken through periodic amendments to the Mines and Minerals (Development & Regulation) Act, 1957 through key changes in 2015, 2020, 2021, and recently in 2023. To increase the domestic source of production, the Ministry of Mines, came up with a new auction regime in 2015, granting Mining licenses (ML) and composite licenses (CL) for mine development through a transparent and time-bound process. Moreover, the National Mineral Exploration Trust (NMET) is supporting the exploration of critical minerals with private agencies also being empanelled to receive funding for exploration activities. The MMDR Amendment Act, 2023 also facilitates mining by including a provision of Exploration licenses (EL) for deep-seated and critical minerals. It also omitted 6 minerals including lithium, from the list of 12 atomic minerals.

Setting an example for cooperative federalism, the government has taken the responsibility to exclusively auction concessions related to 24 critical minerals, while making sure that the revenues are accrued to the concerned state governments. This measure will improve the revenue receipts of the state government, giving a healthy boost to their fiscal position.

Apart from strengthening the domestic mechanisms, collaborative international efforts through multilateral and bilateral engagements can help in building a resilient critical minerals value chain. Collective action is important to achieve our targets and the government is actively forming new partnerships and alliances related to critical minerals such as India’s entry into the Minerals Security Partnership (MSP), the Australia-India Economic Cooperation and Trade Agreement (ECTA) and the efforts of KhanijBidesh India Ltd. (KABIL) to seek mineral acquisition opportunities in countries like Chile and Argentina.

The voluntary high-level principles on critical minerals, as discussed in G20, incorporating innovation, Environmental, Social and Governance (ESG), and circularity will further strengthen our efforts to secure India’s critical minerals for the future. The Prime Minister’s vision of “One Earth, One Family, One Future” under India’s G20 presidency, highlights the importance of our shared goals related to emission reduction and climate change mitigation for a shared future. The groundwork laid down during India’s G20 presidency will strengthen our work on critical minerals, with India taking a leadership role.

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