Centre identifies 30 critical minerals: Why, how, and importance of the exercise

  • June 30, 2023
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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Centre identifies 30 critical minerals: Why, how, and importance of the exercise

Subject : Geography

Section: Economic geography

Context:

  • The Centre has identified 30 critical minerals, including lithium, cobalt, nickel, graphite, tin and copper, which are essential for the country’s economic development and national security.
  • Earlier in 2011, Planning Commission initiated some efforts to identify the critical minerals.

Critical minerals:

  • As per the report, a mineral is critical when the risk of supply shortage and associated impact on the economy is (relatively) higher than other raw materials.
  • The European Union also carried out a similar exercise and categorised critical minerals on the basis of two prerequisites: supply risk and economic importance.
  • Australia refers to critical minerals as: “metals, non-metals and minerals that are considered vital for the economic well-being of the world’s major and emerging economies, yet whose supply may be at risk due to geological scarcity, geopolitical issues, trade policy or other factors”.

The exercise:

  • The identification of these minerals was done on the basis of a report on critical minerals prepared by an expert team constituted by the Ministry of Mines in November 2022.
  • The ministry will revisit the list periodically.
  • In November 2022, the Ministry of Mines constituted a seven-member Committee under the chairmanship of the Joint Secretary (Policy), Ministry of Mines to identify a list of minerals critical to our country and the panel decided to have a three-stage assessment to arrive at a list of critical minerals.
  • The specific trigger for the latest exercise is India’s international commitments towards reducing carbon emissions, which require the country to urgently relook at its mineral requirements for energy transition and net-zero commitments.
  • That report analysed 11 groups of minerals under categories such as metallic, nonmetallic, precious stones and metals, and strategic minerals.

Three-stage process:

  1. In the first stage the panel looked at the strategies of various countries to classifying the mineral as critical. Accordingly69 elements/minerals are segregated for further examination.
  2. In the second stage of assessment, an inter-ministerial consultation was carried out with different ministries to identify minerals critical to their sectors.
  3. The third stage assessment was to derive an empirical formula for evaluating minerals criticality, taking cognizance of the EU methodology that considers two major factors — economic importance and supply risk.

Final list of critical minerals:

  • Based on this process, a total of 30 minerals were found to be most critical for India, out of which two are critical as fertiliser minerals: Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, PGE, Phosphorous, Potash, REE, Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium and Cadmium.

Specialised agency:

  • The committee also called for a need for establishing a National Institute or Centre of Excellence on critical minerals on the lines of Australia’s CSIRO, which is the largest minerals research and development organisation in Australia and one of the largest in the world.
  • This proposed Centre will periodically update the list of critical minerals for India and notify the critical mineral strategy from time to time and will execute a range of functions for the development of an effective value chain of critical minerals in the country.
  • A wing in the Ministry of Mines can be established as a Centre of Excellence for Critical Minerals.

Domestic and global outreach:

  • The Geological Survey of India, an attached office of the Ministry of Mines, has carried out a G3 stage mineral exploration (fairly advanced) during Field Season 2020-21 and 2021-22 in Salal-Haimna areas of Reasi district, Jammu & Kashmir, and estimated an inferred resource of 5.9 million tonnes of lithium ore.
  • A joint venture company namely KhanijBidesh India Ltd. (KABIL) has been incorporated with equity contributions from three Central Public Sector Enterprises.
  • It is mandated to identify and acquire overseas mineral assets of critical and strategic nature such as lithium, cobalt and others so as to ensure supply-side assurance.
  • India has recently been inducted into the Mineral Security Partnership (MSP), a US-led collaboration of 14 countries that aims to catalyse public and private investment in critical mineral supply chains globally.

Global practices:

  • The USA:
    • The US adopted a two-stage screening methodology to arrive at the list of critical minerals. An early warning screening tool assesses a mineral’s potential criticality using three fundamental indicators: supply risk, production growth, and market dynamics.
    • This was followed by an in-depth supply chain analyses and inter-agency collaboration, wherein a detailed analysis of the underlying factors was carried out.
  • The UK:
    • In the UK, the criticality to the British economy was determined in terms of their global supply risks and the economic vulnerability to such a disruption.
    • Three indicators were used to estimate the production concentration, companion metal fraction and recycling rate.
    • A total of 18 minerals were identified as critical to the UK economy.
  • The European Commission:
    • The European Commission has been issuing a list of critical raw minerals since 2011 that is updated every three years.
    • The main parameters used to determine the criticality of the mineral for the EU are the economic importance and supply risk.
    • A total of 34 raw materials are identified as Critical Raw Materials for 2023.
  • Japan:
    • Japan’s first list of critical minerals was prepared by the country’s Advisory Committee on Mining Industry in 1984, under the direction of the Ministry of International Trade and Industry (current METI).
    • Japan has identified a set of 31 minerals as critical for its economy.
  • Australia:
    • The Australian Government, in 2019, released its inaugural Critical Minerals List and associated national strategy and a list of 24 critical minerals was first identified. Two more elements were added to the latest critical mineral strategy.
Centre identifies 30 critical minerals Geography