 "Budget 2024: FinMin announces Critical Mineral Mission; what we know so far")
Presenting the Union Budget for 2024-25 on July 23, Finance Minister Nirmala Sitharaman announced the Critical Mineral Mission to boost the domestic output and recycling of critical minerals like copper and lithium. It also aims to create an impetus for acquiring such minerals abroad.
The Finance Minister, in her Budget speech, said, “We will set up a Critical Mineral Mission for domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets. Its mandate will include technology development, a skilled workforce, an extended producer responsibility framework, and a suitable financing mechanism.”
She also announced that the government will launch the auction of the first tranche of offshore mining blocks, which will be crucial for retrieving mineral deposits from the deep seabed.
What is Critical Mineral Mission?
The Critical Mineral Mission is an initiative launched by the Centre to ensure that the country has a sufficient supply of critical minerals, including copper, lithium, nickel, cobalt and rare earth elements. These minerals are essential components in almost all electronic gadgets – ranging from laptops to electric cars.
Further, these critical minerals are also used in clean energy technologies like wind turbines. Minerals like lithium, copper, cobalt and rare earth elements are critical for several high-priority sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics.
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Why the need for Critical Mineral Mission?
The demand for critical minerals is on the rise with the increasing demand for electronic gadgets and clean energy technologies. However, India is a net importer of critical minerals. For many rare earth minerals, India has to depend on exports from other nations, including China. This also impacts the domestic production of gadgets negatively. Besides, imports of such minerals also lead to a current account deficit.
Notably, the Economic Survey also highlighted the challenges posed by India's dependence on China for critical minerals. Therefore, the Centre had, last year, passed the Mines and Minerals (Development & Regulation) Amendment Bill 2023, through which it can award exploration licences for 30 deep-seated and critical minerals -- including antimony, beryllium, bismuth, cadmium, gallium, germanium, graphite, hafnium, indium, lithium, molybdenum, niobium, and others.
Critical Mineral Mission: Industry reactions
Manufacturing businesses have welcomed the announcement of the Critical Mineral Mission. They have also hailed the exemption of customs duties on 25 critical minerals saying it will provide a major fillip to the processing and refining sectors.
In a post on X, Ola CEO Bhavish Aggarwal said, “The Critical Mineral Mission will be a game changer of India’s energy transition journey. Great to see emphasis on women’s employment too. This budget sets a strong foundation for India’s tech-driven future.”
He added, “Exciting to see the Union Budget 2024-25 prioritising DPI, critical minerals, and job creation. The focus on developing DPI applications in agriculture and other areas lays the data foundation for making India the AI hub of the world.”
In a similar vein, Vedanta Group chairman Anil Agarwal said, “India is import-dependent for these minerals, just like it is for oil. We must not repeat history. We must produce in India... The potential is immense for creating massive jobs and contributing to GDP growth.”
Meanwhile, Jindal Steel also put out a tweet saying, “With a strategic move of complete customs duty exemption on 25 critical minerals, including nickel, production costs for steel are set to significantly decrease. This will support domestic manufacturing and enhance export competitiveness.”