The global race for critical minerals has decisively moved beyond mining pits and factory floors. The real contest today is over the midstream — the processing and refining stage that converts raw ores into high-purity materials essential for clean energy, electric mobility, and digital technologies. This is where economic power is being concentrated. India, despite its large market and strategic ambitions, risks falling behind unless it urgently builds domestic midstream capabilities.
Why the midstream matters more than mining
Critical minerals such as lithium, cobalt, graphite and rare earths are indispensable for batteries, solar panels, wind turbines and semiconductors. While mining attracts attention, it is processing that creates value, determines quality, and controls supply chains. Today, the global midstream is highly concentrated, with China controlling close to 90% of processing capacity for several key minerals. Even ores mined in countries like Australia or Chile are often shipped to China for refining before re-entering global markets.
This structural asymmetry gives Beijing disproportionate leverage over green and digital value chains, making downstream manufacturers elsewhere vulnerable to supply disruptions, price manipulation and geopolitical pressure.
India’s strategic vulnerability
India’s ambitions in electric mobility, renewable energy and advanced manufacturing are directly exposed to this concentration risk. Without domestic processing capacity, India risks becoming permanently dependent on external actors for materials that are central to its energy transition and industrial competitiveness. In strategic terms, this is as much a national security issue as it is an economic one.
Securing feedstock: the first constraint
Any midstream strategy begins with reliable access to raw material. Domestically, the Geological Survey of India plans to undertake around 1,200 exploration projects by 2031, a necessary step towards long-term self-reliance. However, developing a new mine typically takes 10–15 years, making domestic exploration a slow solution.
In the interim, India must secure overseas feedstock through long-term offtake agreements, equity investments, or acquisition of mining rights in resource-rich countries. The government-backed Khanij Bidesh India Ltd. has been tasked with this role, but speed and scale are critical. Strategic mineral stockpiles will also be essential to cushion against geopolitical or market shocks.
From policy signals to processing infrastructure
India has begun articulating a national vision for critical minerals. The identification of 30 critical minerals in 2023 provided strategic clarity. Building on this, the launch of the National Critical Mineral Mission aims to cover the entire value chain — from exploration to recycling.
A key ambition of the mission is the creation of four critical mineral processing parks and self-sufficiency in at least five critical minerals. Delivering on this will require coordinated infrastructure: assured power and water supply, port connectivity, logistics corridors, and shared testing and refining facilities. Single-window clearances, anchor investors and plug-and-play infrastructure will be crucial to avoid delays and underutilisation.
Leveraging strategic partnerships for technology
Processing technology, especially for high-purity and battery-grade materials, is complex and capital-intensive. India must therefore leverage partnerships with technologically advanced economies. Collaboration with Australia on minerals such as lithium, titanium and vanadium, engagement with Japan’s expertise in high-purity metallurgy, and access to German separation and refining technologies can help India meet stringent global standards.
The goal should not be a simple buyer–seller relationship, but joint ownership and co-development of midstream assets that embed capabilities within India.
Human capital and R&D: the silent bottleneck
Advanced mineral processing demands specialised skills in metallurgy, materials chemistry and process control — areas where India currently faces a deficit. Strengthening training and research through IITs, CSIR laboratories and the Centres of Excellence under the NCMM is essential.
Equally important is bridging the gap between laboratory research and commercial deployment. Pilot projects, demonstration plants and dedicated R&D funds can help translate indigenous process flowsheets into scalable industrial solutions tailored to diverse ore grades and environmental conditions.
Creating market certainty for private investment
Midstream projects are capital-intensive and exposed to commodity price volatility. To attract private investment, India must provide market certainty. Mandating progressive domestic sourcing of processed critical minerals by Indian industries can assure offtake. A price-floor or viability-gap mechanism can reduce downside risk for early movers.
These measures should be complemented by calibrated import duties to deter predatory low-cost imports, particularly from China, without undermining competitiveness. Public–private partnerships can further support shared refining infrastructure, certification facilities and logistics networks.
Why this is decisive for India’s future
Control over critical mineral processing will determine whether India remains a downstream consumer or emerges as a serious player in global clean technology value chains. The midstream is the missing link connecting mineral resources to industrial strength, energy security and climate leadership. Delays now could lock India into long-term dependence; decisive action could anchor it at the heart of the next industrial transformation.
What to note for Prelims?
- Meaning and importance of “critical minerals”
- China’s dominance in global mineral processing
- Role of KABIL and the National Critical Mineral Mission
- Difference between mining (upstream) and processing (midstream)
What to note for Mains?
- Explain why midstream processing is strategically more important than mining in critical minerals
- Assess India’s vulnerabilities arising from dependence on external processing hubs
- Discuss the role of international partnerships in building domestic processing capacity
- Evaluate policy measures needed to attract private investment into critical mineral refining
