Importance of reliable supply chain for critical minerals

• The growing demand for clean technologies has led to an uptick in global mining of various critical minerals.
• According to a study conducted by the Union Ministry of Mines, the annual production of key minerals such as lithium, REE, and cobalt registered an increase of 240 per cent, 134 per cent, and 67 per cent respectively,
• In the case of minerals such as cobalt, copper, and nickel, the current mine production is already more than 2 per cent of global reserves.
• However, global supply chains of critical minerals are complex and can be vulnerable to unforeseen disruptions caused by the vagaries of trade treaties, geopolitical 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.

Atmanirbhar Bharat and critical minerals

• The government 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 key amendments to the Mines and Minerals (Development & Regulation) Act, 1957 in 2015, 2020, 2021, and recently in 2023.
• This envisaged the granting of mining licences and composite licences for mine development through a transparent and time-bound process.
• Also, the National Mineral Exploration Trust (NMET) is supporting the exploration of critical minerals with private agencies being empanelled to receive funding for such 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 six minerals including lithium, from the list of 12 atomic minerals.

Way forward

Promoting fiscal federalism while exploration of critical minerals

• Government has taken the responsibility to exclusively auction concessions related to 24 critical minerals, while making sure that the revenues accrue to the concerned state governments.
• This measure will improve the revenue receipts of state governments, giving a healthy boost to their fiscal position.

There is need for international collaboration

• Apart from strengthening 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 forming new partnerships and alliances related to critical minerals – these include India’s entry into the

Minerals Security Partnership (MSP)

• the Australia-India Economic Cooperation and Trade Agreement (ECTA) and the efforts of Khanij Bidesh India Ltd (KABIL) to seek mineral acquisition opportunities in countries like Chile and Argentina.

India’s presidency of G20 and its importance for critical minerals

• As the voluntary high-level principles on critical minerals are discussed in G20, incorporating innovation and environmental and social governance will further strengthen our efforts to secure India’s critical minerals for the future.
• The 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.

Conclusion

• Therefore, the groundwork laid down during India’s G20 presidency will strengthen our work on critical minerals, with India taking a leadership role.