POWERING THE FUTURE: INDIA’S JOURNEY TOWARDS A CLEAN ENERGY REVOLUTION

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Context

India needs a self-reliant supply chain for critical minerals like lithium, cobalt, and Rare Earth Elements to achieve its 2030 clean energy goals (500 GW renewable energy) and 2070 net-zero emissions target, given global competition and geopolitical factors

What are Critical Minerals? 

They are essential for modern technology, clean energy, economic competitiveness, and national security, powering devices, green technologies, industry, and defense.  

The "criticality" of a mineral is determined by two main factors:

• Economic importance: The impact on an economy if the supply of a specific mineral is disrupted.
• Supply risk: Supply chain vulnerability stems from the geographical concentration of critical mineral extraction and processing. For example, the Democratic Republic of Congo leads global cobalt production, and China dominates the processing of most critical minerals.

Examples of critical minerals

The list of critical minerals varies by country, depending on its specific economic and security needs. For example, India identified 30 critical minerals in 2023. Examples include: 

• Lithium: A silvery-white alkali metal often called "white gold," used extensively in batteries for electric vehicles and electronics.
• Rare Earth Elements (REEs): A set of 17 chemical elements vital for permanent magnets in wind turbines, EV motors, and advanced electronics.
• Cobalt: Used in rechargeable batteries, aerospace applications, and pigments.
• Graphite: A form of carbon used in batteries, lubricants, and fuel cells.
• Nickel: A key component in stainless steel, aerospace alloys, and batteries.
• Copper: A cornerstone of all electricity-related technologies, including wiring, solar panels, and wind turbines.
• Platinum Group Elements (PGEs): Including platinum, palladium, and rhodium, these are used in catalytic converters, electronics, and medicine. 

Why are critical minerals important for India?

Green energy transition

Critical minerals are vital for India's clean energy transition, supporting its 2030 renewable energy target of 500 GW and 2070 net-zero emissions goal.

• Electric vehicles (EVs): Lithium, cobalt, and nickel are vital for EV lithium-ion batteries. India's EV push is rapidly increasing demand for these minerals.
• Solar energy: Minerals such as silicon, tellurium, indium, and gallium are vital for the production of photovoltaic (PV) cells in solar panels.
• Wind energy: Rare earth elements (REEs) like neodymium and dysprosium are required for the permanent magnets in wind turbines.
• Energy storage: Lithium, cobalt, and nickel are vital for advanced energy storage, crucial for India's grid stability with more renewable energy.

Economic growth and high-tech manufacturing

A domestic critical mineral supply is crucial for India's manufacturing, economic growth, and "Atmanirbhar Bharat" vision.

• Semiconductors and electronics: Gallium, germanium, and indium are vital minerals for semiconductors and high-tech electronics, supporting Digital India and IndiaAI.
• Industrial ecosystem: A domestic critical mineral base will create a new industrial ecosystem, generating jobs and promoting innovation in downstream industries.
• Reduced import costs: India is highly import-dependent for critical minerals. Local sourcing will reduce import costs and protect against global price volatility.

National security and strategic autonomy

Control over critical minerals has become a new frontier in geopolitics, and India's reliance on a limited number of countries, like China, creates supply chain vulnerabilities. 

• Defense and aerospace: Titanium, tungsten, and rare earths are critical minerals for advanced defense, aerospace, and nuclear manufacturing.
• Geopolitical leverage: Diversifying and localizing critical mineral supplies boosts India's strategic autonomy, reducing vulnerability to geopolitical tensions and export restrictions.

Food Security

Potash and other critical minerals are essential for fertilizer and food production. Securing their supply is vital for India's food security.

India's Deep Vulnerability: A Supply Chain Crisis

Extreme Import Dependence

India is nearly 100% dependent on imports for lithium, cobalt, and nickel, and over 90% dependent for Rare Earth Elements (REEs). This places India in a precarious position, subject to global price volatility and supply disruptions.

The Geopolitical Risk from China

The risk is concentrated, as China controls 60% of global REE production and 85% of its processing capacity (Source: International Energy Agency). This near-monopoly grants China significant geopolitical leverage, risking trade restrictions that could hinder India's clean energy and industrial growth.

Domestic Mining and Processing Gap

While India has vast untapped potential—including the 5.9 million tonnes of inferred lithium resources identified in J&K in 2023—it currently contributes less than 1% of global REE production. The limitation lies in the capacity to process and refine raw ores, not in the exploration for them.

A Missed Opportunity in Urban Mining

India annually produces nearly four million metric tonnes of e-waste, but only 10% is formally recycled. This signifies a lost opportunity to recover valuable critical minerals from "urban mines" through a robust circular economy. (Source: The Hindu)

Government Initiatives and Progress  

National Critical Mineral Mission (NCMM)

Launched with a ₹34,300 crore plan, the NCMM is a comprehensive initiative aimed at strengthening the entire value chain—from exploration and mining to processing and recovery from end-of-life products.

Mines and Minerals (Development and Regulation) Amendment Act, 2023

This landmark legislation opened up private exploration for critical minerals, a crucial step to accelerate discovery and attract investment. Recent successful auctions of 20 critical mineral blocks have attracted bids from both Indian and multinational companies.

KABIL (Khanij Bidesh India Ltd.)

Formed in 2019, this state-run joint venture's mandate is to secure overseas mineral assets through equity acquisition and joint ventures in resource-rich, friendly nations.

Circular Economy Framework

The E-Waste (Management) Rules, 2022, and Battery Waste Management Rules, 2022, establish the regulatory framework to enhance mineral recovery and recycling, setting targets and responsibilities for producers.

Way Forward 

Strengthen Domestic Supply and Foster a Circular Economy

Operationalise Mining Leases: Expedite environmental clearances and infrastructure for auctioned mineral blocks—Lithium in J&K, REEs in Odisha and Andhra Pradesh—for operational mines.

Invest in Processing and Refining: Provide Production-Linked Incentives (PLIs), tax breaks, and research grants to attract private investment in building domestic processing capacity.

Incentivize Urban Mining: IInvest in advanced recycling facilities and strictly enforce e-waste management rules to recover valuable minerals from used batteries and electronics.

Modernise Energy Infrastructure and Mobilise Finance

Invest in Green Energy Corridors: Accelerate investment in grid infrastructure to ensure the stable and efficient evacuation of power from renewable sources.

Digitize Grid Management: Use AI and smart metering to forecast demand, manage the intermittency of renewables, and optimize the dispatch of power.

Address DISCOM Health: Resolve state-owned distribution companies' financial instability to boost renewable project bankability and attract low-cost finance.

Enhance International Cooperation and Build Resilient Supply Chains

Empower KABIL: Provide KABIL with the diplomatic and financial backing to expedite the acquisition of overseas mineral assets.

Strengthen Strategic Partnerships: Strengthen collaboration with mineral-rich democracies such as Australia, as exemplified by the India–Australia Renewable Energy Partnership.

Promote Technology Transfers: Collaborate on R&D and joint ventures to acquire advanced mineral processing and recycling technologies, decreasing reliance on single countries.

Conclusion

To achieve clean energy self-reliance, India must boost domestic critical mineral mining, recycling, and processing, ideally via public-private partnerships, to support its EV, solar, and energy storage goals and become a green economy leader.

Source: thehindu