Note4Students

From UPSC perspective, the following things are important :

Prelims level: Critical Minerals

Mains level: Read the attached story

critical

Central idea

A recent working paper from Centre for Social and Economic Progress (CSEP) extends the earlier minerals assessment for 23 minerals by assessing the criticality levels of 43 select minerals for India.
This is based on their economic importance (demand-side factors) and supply risks (supply-side factors) which are determined through the evaluation of specific indicators.

What are Critical Minerals?

Critical minerals are elements that are crucial to modern-day technologies and are at risk of supply chain disruptions.
These minerals are used in making mobile phones, computers, batteries, electric vehicles, and green technologies like solar panels and wind turbines.
Minerals such as antimony, cobalt, gallium, graphite, lithium, nickel, niobium, and strontium are among the 22 assessed to be critical for India.
Many of these are required to meet the manufacturing needs of green technologies, high-tech equipment, aviation, and national defence.

Why are these resources critical?

Clean energy transition: Critical minerals are essential to the ecosystem that fuels the world’s transition towards clean energy and digital economy.
Strategic nature: Any supply shock can severely imperil the economy and strategic autonomy of a country that is over-dependent on others to procure critical minerals.
Rare availability: Supply risks exist due to rare availability, growing demand, and complex processing value chain.

Dominant role: China is the world’s largest producer of 16 critical minerals, including cobalt and rare earth elements.
Monopoly in processing: The country has a strong presence across the board in processing operations, with a share of refining around 35% for nickel, 50-70% for lithium and cobalt, and nearly 90% for rare earth elements.
Control over offshore mines: China also controls cobalt mines in the Democratic Republic of Congo, from where 70% of this mineral is sourced.
Supply chain dominance: The country’s dominance in critical minerals production and processing raises concerns of a supply disruption in case of a geopolitical conflict.

Limited availability of critical minerals: The rare availability of critical minerals poses a challenge in meeting the growing demand for these minerals.
Geopolitical risks: Complex supply chains can be disrupted by hostile regimes or politically unstable regions, leading to supply chain disruptions.
Dominance of certain countries: A few countries, such as China, are the dominant producers of critical minerals, leading to concerns over supply disruptions in case of a geopolitical conflict.
Increasing demand for critical minerals: With the shift towards renewable energy technologies and electric vehicles, the demand for critical minerals such as copper, lithium, and rare earth elements is increasing rapidly.
Reliance on foreign partners: Countries with limited reserves and higher requirements for critical minerals may have to rely on foreign partners to meet their domestic needs, leading to supply chain vulnerabilities.
Environmental and social concerns: The extraction and processing of critical minerals can have negative environmental and social impacts, leading to challenges in meeting sustainability goals.

Several countries are taking measures to ensure a consistent supply of critical minerals to their domestic markets.

India: It has set up Khanij Bidesh India Ltd. (KABIL), a joint venture of three public sector companies, to ensure a consistent supply of critical and strategic minerals to the Indian domestic market.
US: It has ordered a review of vulnerabilities in its critical minerals supply chains and shifted its focus on expanding domestic mining, production, processing, and recycling of critical minerals and materials.
Australia: Its Critical Minerals Facilitation Office (CMFO) and KABIL had recently signed an MoU aimed at ensuring reliable supply of critical minerals to India.
UK: It has unveiled its new Critical Minerals Intelligence Centre to study the future demand for and supply of these minerals, and its critical mineral strategy will be unveiled later this year.

Developing domestic sources of critical minerals: This can be achieved by promoting exploration and mining activities, both by public and private sector entities.
Encouraging responsible mining practices: The Indian government should encourage responsible mining practices that minimize negative environmental and social impacts of mining activities.
Developing recycling capabilities: This can be achieved by promoting research and development in recycling technologies and incentivizing the adoption of recycling practices.
Promoting transparency in the supply chain: India should promote transparency in the critical minerals supply chain by ensuring the traceability of minerals from the point of extraction to the point of end-use.
Investing in research and development: India should invest in research and development to develop new technologies and processes for efficient extraction, processing, and recycling of critical minerals.
Developing a national critical minerals strategy: India should develop a national critical minerals strategy that identifies priority minerals, promotes domestic exploration and mining, and promotes sustainable and responsible mining practices.

India has a significant mineral geological potential, many minerals are not readily available domestically.
Hence, India needs to develop a national strategy to ensure resilient critical minerals supply chains, which focuses on minerals found to be critical in this study.