United Nations Framework Classification for Resources

United Nations Framework Classification for Resources

Subject: Economy

Context:

Industry body Assocham has sought reduction in basic customs duty and correction of inverted duty structure on critical raw materials for the aluminium industry.

Concept:

• Critical Raw Materials (CRMs) are those raw materials that are economically and strategically important for the economy but have a high-risk associated with their supply.
• Used in environmental technologies, consumer electronics, health, steel-making, defence, space exploration, and aviation, these materials are not only ‘critical’ for key industry sectors and future applications, but also for the sustainable functioning of the economy.
• They include the rare earth elements and other metals such as lithium, indium, tellurium, gallium, and platinum group elements.
• Based on their individual needs and strategic considerations, different countries create their own lists.

Assessing the criticality

• India has resources of nickel, cobalt, molybdenum and heavy rare earth elements, but further exploration is needed to evaluate the quantities of their reserves.
• India does not produce some of the key minerals for making photo-voltaic cells, such as silicon, silver, indium, arsenic, gallium, germanium, and tellurium;
• India also does not produce key minerals needed to make EV batteries, including lithium and cobalt;
• Lithium, strontium and niobium have relatively high economic importance for India, and heavy rare earth elements, niobium and silicon have relatively high supply risks;
• Titanium, lead, and manganese face relatively low levels of supply risks;
• Nine minerals have relatively low economic importance: titanium, graphite, silver, vanadium, zinc, lead, cerium, neodymium, and indium; and
• Most minerals have some degree of substitutability, except for niobium and silver, for which there are no good substitutes.

The United Nations Framework Classification for Resources (UNFC):

• It is an international scheme for classifying and reporting energy and raw material resources.
• It is a global classification and management system applicable to mineral, petroleum, nuclear fuel, renewable energy and anthropogenic resources, as well as water and injection projects for geological storage.
• UNFC is a policy tool to provide harmonized social, environmental, and economic data for policymakers to create resilient supply chains.
• Data can then provide the basis for resource management decisions as part of the United Nations Resource Management System, in alignment with the Sustainable Development Goals.
• The Expert Group on Resource Management is responsible for the promotion and further development of the United Nations Framework Classification for Resources (UNFC) and the United Nations Resource Management System (UNRMS).