[4th August 2026] The Hindu OpED: Critical minerals, the foundation of strategic power

Mentor’s Comment

Critical minerals have moved from the margins of resource policy to the centre of industrial strategy and national security. China’s dominance in refining, sharpened by rare-earth export controls announced in 2025, has exposed how concentrated the global supply chain is and how vulnerable importing economies remain. India holds domestic reserves but lacks the processing and refining capacity that decides who actually controls supply.

What are critical minerals?

1. Definition: Critical minerals are metals and elements that are essential to modern technology and defence but face a high risk of supply disruption due to concentrated production. Lithium, cobalt, nickel, graphite, copper and rare earth elements are the core group.
2. Why they matter now: They are foundational to electric vehicles, battery storage, renewable power, semiconductors, defence systems and advanced manufacturing. As decarbonisation and digitalisation accelerate, mineral security is becoming as strategically important as oil once was.

Why is the global supply picture a strategic risk, not a commercial one?

1. Refining is concentrated in a few countries: For copper, lithium, nickel, cobalt, graphite and rare earths, the average market share of the top three refining countries rose to 86% in 2024 from around 82% in 2020. Supply now depends on a handful of nodes.
2. China leads across nearly all strategic minerals: China is the leading refiner in 19 of 20 strategic minerals, with an average market share of about 70%. This concentration turns minerals into geopolitical leverage rather than ordinary traded commodities.
3. Processing is the true chokepoint: In 2024, China accounted for over 90% of rare earths and graphite processing, nearly 75% of cobalt and 70% of lithium chemicals. Control of the midstream, not the mine, confers power.
4. Export controls have weaponised supply: China’s rare-earth export controls announced in 2025 raised alarm across energy, automotive, defence, aerospace, Artificial Intelligence and semiconductor sectors. A single supplier’s policy decision can now disrupt entire industries.

What do foreign responses show about the value of processing capacity?

1. European Union, mandated benchmarks: The Critical Raw Materials Act sets 2030 targets of 10% domestic extraction, 40% processing and 25% recycling, with no more than 65% of any strategic mineral sourced from a single country. It builds integrated supply chains through binding mandates.
2. United States, mine-waste refining and defence dependence: Firms such as Phoenix Tailings use electrolysis to extract rare earths from mine tailings, backed by a USD 500 million Pentagon loan to expand separation and metallization, the weakest stage of the mines-to-magnets chain. Weapons such as Tomahawk cruise missiles, THAAD interceptors and F-35 jets fail without these inputs.
3. United States, samarium bottleneck: The defence sector needs 50 to 100 tonnes of samarium each year, yet domestic capacity is tiny, forcing reliance on revived European sites. Solvay restarted separating rare earths at La Rochelle in France after China choked processed-material outflows in April 2025.
4. United States, tungsten deadline: The Pentagon has set a January 2027 cut-off for China-sourced tungsten, but China controls roughly 80% of global mine supply and a larger share of downstream processing. Building domestic capacity will take years, forcing reliance on existing inventories.

How is India positioned, and where is the gap?

1. Reserves exist but supply security does not: India holds reserves of cobalt, copper, graphite and nickel, plus monazite deposits containing rare-earth oxides. It still imports lithium, cobalt and nickel.
2. The critical gap is processing and refining: India has bulk-mineral experience but relies on imports for high-purity critical mineral products. Capacity and high-purity production remain constrained.
3. Structural constraints slow progress: Exploration is shallow, regulatory clearances are time-consuming, private participation is limited and remote-region project economics are weak. Recycling cannot substitute for primary supply in the near term.
4. Rising demand widens the exposure: Under a net-zero scenario, cumulative demand for critical energy-transition minerals could reach roughly 169 million tonnes by 2070, well above a current-policy pathway.

What is India’s policy response since 2023?

1. National Critical Mineral Mission: The government has identified 30 critical minerals and launched the Mission to support the value chain, targeting 1,200 domestic exploration projects by 2030-31, production of at least 15 critical minerals, and acquisition of 50 overseas mining assets.
2. MMDR Act Amendment (2023): Amended the Mines and Minerals (Development and Regulation) Act to empower the central government to auction mining leases and composite licenses for 24 critical and strategic minerals (like lithium and cobalt).
3. Overseas acquisition through KABIL: Khanij Bidesh India Limited (KABIL), a joint venture of state-owned firms for overseas mineral assets, has secured acreage in Argentina’s Catamarca province for lithium exploration.
4. Domestic rare-earth corridors: The 2026-27 Budget proposed rare-earth corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu.
5. Diplomatic diversification: The India-United States critical minerals and rare earths framework signed in May 2026 provides an additional lever to diversify supply away from a single source.

What are the challenges to India’s critical mineral security?

1. Midstream absence: Without high-purity refining, India cannot participate meaningfully in supply-chain realignment even where it mines the raw ore.
2. Import dependence for battery metals: Continued reliance on imported lithium, cobalt and nickel leaves electric-vehicle and storage ambitions exposed to external disruption. India imports more than 70% of its lithium-ion battery requirements from China and Hong Kong.
3. Long lead times: Exploration, clearances and processing plants take years, so near-term vulnerability persists regardless of policy intent.
4. Recycling feedstock is thin: Collection systems, feedstock volumes and technology remain limited, so recycling cannot yet offset primary shortfalls. Only 5% to 10% of digital waste in India is being systematically recycled, the rest is being wasted.
5. No strategic stockpile in place: India has not yet operationalised buffer stocks for critical minerals, leaving it without a cushion against sudden export controls abroad.

Conclusion

Mineral security now defines India’s industrial and strategic trajectory, and the decisive gap is not reserves but processing and refining capacity. Individual measures are necessary but insufficient without a comprehensive strategy that sets mineral-specific risk thresholds, integrates recycling, builds strategic stockpiles and creates a coordinated institutional framework. The priority is to convert domestic potential into refining capability and reduce strategic vulnerability through sustained execution.

Back2Basics

National Critical Mineral Mission:

1. Launched by the Union government to secure the critical mineral value chain, from exploration to recycling.
2. Nodal ministry: Ministry of Mines.
3. Minerals identified: 30 critical minerals notified for India.
4. Key targets: 1,200 domestic exploration projects by 2030-31, production of at least 15 critical minerals, and acquisition of 50 overseas mining assets.
5. KABIL: Khanij Bidesh India Limited, a joint venture of NALCO, Hindustan Copper and Mineral Exploration Corporation, tasked with acquiring strategic mineral assets abroad.
6. Legal backing: The Mines and Minerals (Development and Regulation) Act, 1957 was amended in 2023 to empower the Central Government to auction leases for specified critical minerals.

Strategic Critical Minerals Cooperation Framework (India and USA)

1. India and the United States signed the Strategic Critical Minerals Cooperation Framework on May 26, 2026, in New Delhi.
2. The agreement was finalized to secure supply chains, boost clean energy manufacturing, and reduce reliance on single-source monopolies like China.

Key Goals of the Partnership

1. Supply Chain Security: Protects sensitive mineral and rare earth networks from coercive market practices.
2. Collaboration Areas: Focuses heavily on joint mining, advanced processing, recycling, and scrap management.
3. Broader Alignment: Coordinates with plurilateral efforts like the Quad Critical Minerals Initiative and the Forum on Resource Geostrategic Engagement (FORGE).

PYQ Relevance

[UPSC 2025] Consider the following statements:

I. India has joined the Minerals Security Partnership as a member. II. India is a resource-rich country in all the 30 critical minerals that it has identified. III. The Parliament in 2023 has amended the Mines and Minerals (Development and Regulation) Act, 1957 empowering the Central Government to exclusively auction mining lease and composite license for certain critical minerals.

Which of the statements given above are correct? (a) I and II only (b) II and III only (c) I and III only (d) I, II and III

Answer: (c)