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Why mineral are critical
Context
The government has taken significant steps regarding critical minerals in the past year, including identifying a list of 30 critical minerals and amending mining laws to allow private sector participation in their auction, reflecting India's focus on securing essential resources for various sectors.
Importance and Identification of Critical Minerals:
- Identification:India identified 30 critical minerals based on factors like disruption potential, substitutability, and import reliance, recognizing their crucial role in multiple sectors beyond decarbonization.
- Significance for industries: Critical minerals are essential for industries ranging from fertilizers to defense and are integral to achieving clean energy goals, with electric vehicles and renewable energy technologies requiring substantial mineral resources.
- Projections:The global demand for critical minerals is projected to surge significantly to meet climate goals, emphasizing the need for strategic planning and resource security to support India's decarbonization ambitions.
Challenges and Global Landscape:
- Challenges due to concentration:The concentration of critical mineral reserves in a few countries, particularly China, poses challenges for global supply chains, with disparities in mineral reserves and processing capacities creating vulnerabilities.
- Dominance:China's dominance in processing critical minerals and rare earths has raised concerns, as it exerts control over global supply chains and uses its monopoly to influence geopolitical dynamics and technological advancements.
- India’s attempt to mitigate risk:India's participation in initiatives like the US-led Minerals Security Partnership aims to strengthen critical mineral supply chains by collaborating with countries possessing deposits and processing technology, mitigating dependency risks.
India's Decarbonization Goals and Dependency Risks:
- India's ambitious plans for decarbonization and achieving net-zero emissions require substantial quantities of critical minerals, particularly for battery manufacturing to support electric mobility and renewable energy deployment.
- Challenges for domestic market: Despite efforts to secure critical minerals through agreements with countries like Australia, India remains heavily reliant on imports, posing challenges for domestic manufacturing and technological development.
- Need of long-term planning:The lack of access to critical minerals and processing technology could emerge as a significant impediment to India's decarbonization journey, highlighting the importance of long-term strategic planning and resource diversification.
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