As India prepares to host the G20 Leaders’ Summit in New Delhi, the spotlight is on the critical role of minerals in the clean energy transition. This meeting could serve as a catalyst for India’s efforts to secure its supply chains for critical minerals. Critical minerals, including lithium, graphite, cobalt, titanium, and rare earth elements (REE), are essential for various sectors, including high-tech electronics, telecommunications, transportation, and defense.
About Critical Minerals
Critical minerals are those whose supply shortage poses a higher risk to the economy compared to other raw materials. These minerals are vital for economic development, national security, and various industries. Cobalt, lithium, silicon, graphite, and REEs, among others, play a pivotal role in clean technologies like solar modules, wind turbines, and batteries
Meeting Sustainability Targets
India has set ambitious sustainability targets, aiming for 500 GW of non-fossil power capacity by 2030 and a 45% reduction in emissions intensity below 2005 levels by the same year. Achieving these targets relies heavily on the widespread deployment of clean technologies, which, in turn, depend on a stable supply of critical minerals.
Reducing Import Dependency and Enhancing National Security
The global supply chains for critical minerals are intricate and susceptible to disruptions caused by trade treaties and geopolitical factors. India’s increasing demand for these minerals has led to a surge in imports. Establishing a reliable supply chain domestically is not just a matter of economic prudence but a strategic imperative. It reduces import dependency, strengthens national security, and promotes the development of a domestic value chain to cater to India’s growing needs.
Government Initiatives for the Growth of the Domestic Critical Minerals Sector
The Indian government has taken significant steps to bolster the domestic critical minerals sector:
- Exploration, Processing, Use, and Recycling: To align with the vision of Atmanirbhar Bharat (self-reliant India), the government is actively promoting the exploration, processing, use, and recycling of critical minerals.
- Policy Reforms: Key amendments to the Mines and Minerals (Development & Regulation) Act in recent years have paved the way for a more transparent and efficient mining sector.
- New Auction Regime: Introduced in 2015, this regime streamlines the process of granting mining licenses and composite licenses for mine development, promoting domestic production.
- Collaboration between Public and Private Sectors: The National Mineral Exploration Trust (NMET) is collaborating with private agencies to fund critical mineral exploration. The MMDR Amendment Act, 2023, facilitates mining by including provisions for Exploration Licenses (EL) and auctions.
- Cooperative Federalism: The central government is responsible for exclusively auctioning concessions related to 24 critical minerals, with revenues benefiting state governments, thus enhancing their fiscal positions.
Outcomes of the G20 Energy Transitions Ministers’ Meeting under India’s Presidency
During India’s G20 Presidency, the importance of collaboration and shared responsibility in accelerating clean, sustainable, and inclusive energy transitions was highlighted. The outcomes underscored the significance of energy security, diversified supply chains, and universal energy access. Ensuring sustainable and affordable energy supplies is crucial to meet growing global energy demands.
Way Forward
To secure a resilient critical minerals value chain, India is forging international collaborations and partnerships. These include India’s participation in the Minerals Security Partnership (MSP), the Australia-India Economic Cooperation and Trade Agreement (ECTA), and efforts by Khanij Bidesh India Ltd (KABIL) to seek mineral acquisition opportunities in countries like Chile and Argentina.
UPSC Mains Questions
- How might India’s efforts to secure critical minerals impact its energy transition and economic development?
- What are the potential risks associated with the global supply chain of critical minerals, and how can these risks be mitigated?
- Evaluate the role of policy reforms and collaborative initiatives in strengthening India’s domestic critical minerals sector.
- How can international partnerships and alliances contribute to the long-term sustainability of critical minerals for India and the world?
