In a first-of-its-kind study, researchers at the Council on Energy, Environment and Water (CEEW) analysed 49 non-fuel minerals for their impact on India's manufacturing growth. The list includes minerals of prime importance (now and until 2030) across all major manufacturing sub-sectors and extends well beyond the 12 "strategic minerals" identified by the erstwhile Planning Commission. The framework considers both economic importanceand supply risks. Even if a mineral were used in small quantities in a high-value-add manufacturing sector (say, tantalum in electronics) it could be more critical than a mineral used in large quantities in a low-value-add manufacturing sector. Supply risks are evaluated based on each mineral's domestic endowment, geopolitical risk, substitutability, and the potential share of recycled mineralsin manufacturing processes.
Based on a dynamic scenarios-based framework, CEEW identifies 12 minerals as most critical (high economic importance and high supply risk). For instance, beryllium is critical for nuclear and aerospace. Chromium is critical for stainless steel, but its mining is toxic and, despite being a major producer, India's existing reserve base would last another 14 years at current production rates.
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India is completely import-dependent for seven of the critical minerals and nearly half of all minerals analysed. There is lack of clarity on resource availability; lack of recovery of by-product minerals; absence of commercial and technical viability of proven reserves; and rapid depletion of proven reserves. Niobium is needed to make super-alloys for military and electronics applications but all supplies come from Brazil and Canada. Seventeen rare-earths have wide applications (clean energy, lazers, flat-screen TVs, permanent magnets, nuclear reactors, etc.) but China accounts for 97 per cent of production. Zirconium (used in specialty alloys, jewellery, ceramics, military applications) is obtained from processing heavy mineral sands. India is third largest producer of zircon, yet it is susceptible to supply risks in future due to its low recyclability.
India has reasonably high production of primary metals like lead, zinc, copper and aluminium, yet there is little sign of by-product recovery (except tin). India is fully dependent on germanium imports, despite being the fourth largest producer of its parent mineral zinc. It is critical for semiconductors and fibre optics and could be sourced by promoting e-waste recycling. While demand for some minerals might be low today, a more high-value manufacturing mix would make many such minerals critical in future.
Given their importance to India's manufacturing future, the new minister could spearhead a more strategic approach to critical minerals. First, institutional reforms for better analysis of mineral criticality. The Geological Survey of India and Indian Bureau of Mines (both under the Ministry of Mines) could play a more significant role. Better coordination between several departments and ministries is needed to optimise the resource exploration planning process. The National Centre for Mineral Targeting, proposed under the NMEP, could do this task using the framework we have developed.
Secondly, increase domestic exploration and R&D in mining and mineral processing technologies. Currently, less than 10 per cent of India's total landmass has been geo-scientifically surveyed for its underlying mineral wealth. Lack of baseline data is a big deterrent to private investment in exploration activities. The recently amended MMDR Act, 2015 advocates for a transparent regime to grant mining leases. But some provisions, such as non-exclusive reconnaissance permit (RP), discourage private investment. And provisions for royalty payments from subsequent miners to RP holders are not seen as lucrative enough.
When resources are limited, industry and/or government have to choose between R&D, trade, recycling, or finding substitutes. India is the second largest producer of graphite (used in solar panels) but needs technologies to convert low-grade reserves into high purity materials. But while R&D is needed to find substitutes or improve recycling rates, these would not fully mitigate overseas supply risks. China, for instance, is a major supplier of six of India's 12 most critical minerals, such as germanium, rare-earths, or strontium.
Therefore, thirdly, India has to conclude diplomatic and trade agreements and seek overseas mining assets.Mineral-specific supply contracts are needed for germanium (China, Finland), niobium ((Brazil), rhenium (Chile, United States), strontium (China, Spain), tantalum (Brazil), and rare-earths (China). India's nascent mining industry makes it difficult to secure overseas assets. Instead, India can develop joint partnerships with existing global players in Australia, Brazil, Chile, and South Africa, among others. To make in India, we need minerals in India. With his interest in renewable energy, electric vehicles, efficient lighting (which will need many of these minerals), the new Mines Minister can make critical minerals his mission.