The Union Cabinet has approved the launch of the National Critical Mineral Mission (NCMM) with an expenditure of Rs.16,300 crore and expected investment of Rs.18,000 crore by PSUs, etc.

About National Critical Mineral Mission

• Announced in Union Budget 2024-25
• Objective: To secure India’s critical mineral supply chain by ensuring mineral availability from domestic and foreign sources. 
  • Strengthening the value chains by enhancing technological, regulatory, and financial ecosystems to foster innovation, skill development, and global competitiveness in mineral exploration, mining, beneficiation, processing, and recycling.
• Duration: FY 2024-25 to FY 2030-31.

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Key Features of NCMM

• Scope: Covers entire value chain—exploration, mining, beneficiation, processing, and recovery from end-of-life products.
• Exploration: Intensified exploration within India and offshore areas.
• Regulatory Process: Fast-track approval for critical mineral mining projects.
• Financial Incentives: Provided for exploration and recovery from overburden and tailings.

Mission Components

1. Increasing Domestic Production: Expand exploration and mining (1200 projects, 100+ blocks auctioned),  Mining in offshore areas (Polymetallic nodules), fast-track regulatory approvals, and recover critical minerals from overburden, tailings, and waste materials.
2. Acquisition of Assets Abroad: Encourage PSUs and private companies to acquire critical mineral assets overseas, with government support for mapping, exploration, and infrastructure development in resource-rich countries.
3. Recycling of Critical Minerals: Develop guidelines and incentive schemes for recycling, and establish a Recycling Advisory Group to optimize recovery from domestic and imported products.
4. Trade and Markets: Enhance trade with resource-rich countries, eliminate import duties on critical minerals, and develop a National Critical Mineral Stockpile to guard against supply disruptions.
5. Scientific Research & Technological Advancement: Promote R&D, establish Centers of Excellence, and simplify regulations to foster innovation and global collaboration in critical mineral technologies.
6. Human Resource Development: Develop skilled workforce through targeted degree programs, scholarships, and capacity-building programs for resource-rich countries.
7. Funding and Fiscal Incentives: Develop fiscal measures to incentivize exploration and mining, leverage international funding, and integrate with existing schemes for financing mission activities.

Governance Framework

• Mission Secretariat: It will be created.
  • Led by Joint Secretary, includes geologists, mineral economists, and industry professionals.
• Empowered Committee: Chaired by Cabinet Secretary, includes members from relevant ministries to monitor and review mission activities.
  • The Ministry of Mines will be the administrative Ministry.

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About Critical Minerals

• Definition: These are the minerals which are essential for economic development and national security but the scarcity and limitation of its geographical availability leading to supply chain vulnerability and disruption constitute its criticality.
• Major Critical Minerals: The Report of the Committee on Identification of Critical Minerals constituted by Ministry of Mines has identified 30 critical minerals,
  • Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, PGE, Phosphorous, Potash, REE, Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium and Cadmium.
• Top Producers: According to the International Energy Agency, the major producers of critical minerals are China, Congo, Chile, Indonesia, South Africa, and Australia. 
  • China has global dominance in terms of processing.
• Usage: 
  • Advanced Electronics: They are critical for making semiconductors and high-end electronics manufacturing.
  • Clean Energy Technology: These minerals are an essential component in many clean energy technologies, from wind turbines and solar panels to electric vehicles.
  • Transport and Communications: They are also used in manufacturing fighter jets, drones, and radio sets, Aircrafts and mainly power the transition to Electric Vehicles
  • Diverse Sectors: To manufacture advanced technologies in diverse sectors such as mobile phones, tablets, electric vehicles, solar panels, wind turbines, fibre optic cables, and defence and medical applications.
  • Battery and Storage Technology: These minerals are critical to develop the storage technology in terms of advancements in battery technology like Lithium-Ion.

Importance of Critical Minerals

• Key Role in Green Energy Transition: Essential for technologies like batteries (lithium, cobalt), solar panels (silicon, silver), and wind turbines (rare earth elements).
  • As per the International Energy Agency (IEA), lithium demand rose by 30% in 2023, while demand for nickel, cobalt, and graphite grew 8–15%.
• Global Climate Goals: Critical to achieving the net-zero emissions target and limiting global warming to 1.5°C.
  • Projections by IEA: By 2040, demand is expected to increase:
    • Lithium (8x), graphite (4x), cobalt, nickel, and rare earths (2x).
• Economic and Strategic Importance: Aggregate global value of critical minerals pegged at $325 billion in 2023.
  • Crucial for manufacturing defense equipment, EVs, and semiconductors.

Reserves of Critical Minerals in India

• Graphite: India has 9 million tonnes of reserves, with production reported from 12 mines.
  • Tamil Nadu was the leading producer of graphite in India in 2021-22, accounting for 63% of the total output. Odisha was the second leading producer.
  • Arunachal Pradesh has the highest graphite reserves in India, with 43% of the country’s total resources.
• Lithium: India’s first lithium reserves were discovered in Jammu and Kashmir in 1999. 
  • The Geological Survey of India (GSI) also discovered lithium reserves in Rajasthan’s Degana, which are believed to be larger than the reserves in Jammu and Kashmir.
• Ilmenite (Titanium): India holds 11% of global deposits, yet imports $1 billion worth of titanium dioxide annually.
  • Odisha is the leading producer of ilmenite in India, contributing 60% of the country’s total production in 2021-22. 
  • Kerala and Tamil Nadu are the second and third largest producers, respectively. 
• Phosphorous: Rajasthan and Madhya Pradesh are the two states in India that produce the most phosphate rocks:
  • Rajasthan: 31% of India’s total rock phosphate reserves and resources
  • Madhya Pradesh: 19% of India’s total rock phosphate reserves and resources 
• Potash: Rajasthan is the highest producer of potash in India, contributing 91% of the country’s total potash resources. 
  • The state has an estimated 2.4 billion tons of potash reserves, which is about 90% of India’s total estimated reserves.
  • Other Major reserves are located in Madhya Pradesh (Panna district), and Uttar Pradesh (Sonbhadra and Chitrakoot districts).
• Rare Earth Elements (REE): India has an estimated 11.93 million tonnes of monazite from beach sand containing 55–65% rare earth oxides.
  • Andhra Pradesh is the state in India with the highest resources of rare earth elements (REEs), with 3.69 million tonnes.
  • Other states with REE resources include: Kerala, Tamil Nadu, Odisha.
• Platinum Group Elements (PGE): About 15.7 tonnes of PGE are located in Odisha (Nilgiri, Boula-Nuasahi, Sukinda) and Karnataka (Hanumalpura).

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Import Dependency of Critical Minerals

• Lithium: India is 100% import-dependent for lithium, primarily sourced from Chile, Russia, and China.
• Cobalt: Completely imported, with key sources being China, Belgium, and Japan.
• Nickel: 100% imported from countries such as Sweden, China, and Indonesia.
• Vanadium: Fully imported, mainly from Kuwait, Germany, and South Africa.
• Germanium: Entirely imported from China, South Africa, and France.
• Rhenium: India relies on imports from Russia, the UK, and China.
• Beryllium and Tantalum: Fully imported, with no domestic reserves reported.
• Silicon: India produces limited quantities and relies heavily on imports from China, Malaysia, and Norway.

Government Initiatives for Production of Critical Minerals

• Amendments to the Mines and Minerals Act (2023): The government has amended the Mines and Minerals (Development and Regulation) Act, 1957 to allow the auction of critical mineral blocks. The first auction was held in November 2023 for 20 blocks. 
  • These amendments aim to enhance private sector involvement in exploration and mining.
  • The streamlined auction process and introduction of Exploration Licenses aim to facilitate tapping into deep-seated and untapped mineral reserves.
• Strengthening Refining and Processing Capabilities: India has initiated efforts to build domestic refining and processing infrastructure to reduce its reliance on imports for downstream processes.
  • During 2024, under the R & D Component of Science and Technology Programme of the Ministry of Mines, 10 R & D Projects related to extraction, recovery and recycling of critical minerals have been approved for taking up through various Indian Institutes and research laboratories.

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International Cooperation on Critical Minerals

• Bilateral Partnerships:
  • Australia: In March 2022, KABIL signed a Memorandum of Understanding with Australia for a critical mineral investment partnership and established the Australia-India Critical Minerals Research Hub. 
  • These initiatives focus on lithium and cobalt projects and research on sustainable mining.
  • Latin America (Argentina, Chile, Bolivia): India signed a $24 million lithium exploration pact with a state-owned enterprise in Argentina in January 2024 for five lithium brine blocks.
    • KABIL acquired 15,703 Ha in Argentina for lithium exploration.
    • KABIL is actively working on securing mineral supplies by facilitating the acquisition of assets in Bolivia and Chile. 
  • United States: India is negotiating a pact to enhance supply chains for cobalt, lithium, nickel, and rare earth elements under the U.S.-led Mineral Security Partnership (MSP).
  • Canada and Brazil: India is exploring cooperation in mining and critical mineral supply chains through bilateral engagements.
  • Collaboration with Central Asia: In November 2024, India and Kazakhstan formed a joint venture called IREUK Titanium Limited to produce titanium slag in India.
    • India has proposed the establishment of an India-Central Asia Rare Earths Forum to leverage the region’s rich resource base.Multilateral Partnerships:
  • Mineral Security Partnership (MSP): India joined as the 14th member in June 2023 to promote resilient and responsible critical mineral supply chains globally. 
  • Quad and Indo-Pacific Economic Framework (IPEF): India participates in these frameworks to strengthen clean energy technologies and critical mineral supply chain resilience.G20 and G7: India has actively advocated for principles ensuring equitable and resilient supply chains for critical minerals through these platforms.
  • International Energy Agency: India’s Ministry of Mines signed a Memorandum of Understanding with the International Energy Agency to streamline policies, regulations, and investment strategies for the critical minerals sector in line with global best practices.
  • Initiative on Critical & Emerging Technologies (iCET): Announced in May 2022, with annual review meetings.
    • 12 projects prepared under iCET involving GSI, IBM, and IREL, in collaboration with US institutes.
  • Quadrilateral Security Dialogue (Quad): Strategic forum involving India, USA, Australia, and Japan.
    • Focus on clean energy supply chains and critical minerals, with the establishment of the Quad Investors Network (QIN).
  • Engagement with the Global South: India has initiated partnerships with African nations, including Zambia, Congo, and Namibia, for sourcing minerals like copper and cobalt.
  • These collaborations emphasize ethical sourcing, fair practices, and diversifying mineral supply chains.

Challenges in India’s Critical Minerals Mission 

• Heavy Import Dependence: India is almost entirely dependent on imports for critical minerals like lithium, cobalt, and nickel.
  • In FY 2023-24, India spent over ₹34,000 crores on importing lithium, cobalt, nickel, and copper, with 70–80% of lithium imports coming from China.
  • India procured 50,000 tonnes of amorphous graphite and 5,300 tonnes of nickel oxide from China between 2017 and 2023.
• China’s Dominance in Supply Chains: China controls approximately 60% of global production and 85% of processing capacity for critical minerals, including rare earths, lithium, and cobalt.
  • China processes 59% of lithium and 73% of cobalt globally, dominating the midstream and downstream value chains.
  • In 2023, China imposed export restrictions on graphite and other minerals, disrupting global supply chains.
• Lack of Domestic Processing Capabilities: India lacks the infrastructure for refining and processing critical minerals, which are essential for downstream industries.
  • Most mineral blocks auctioned in India remain unsold due to insufficient domestic processing technologies.
• Technological and R&D Deficits: There is limited investment in research and development for extraction and refining technologies.
  • Deep-seated minerals like cobalt and nickel remain unexplored in India due to the absence of advanced mining techniques.
• Geopolitical Vulnerabilities: Dependence on a few countries for critical minerals exposes India to supply disruptions due to geopolitical tensions.
  • During the 2010 China-Japan dispute, China imposed export bans on rare earths, severely impacting Japan’s tech industry.
  • The ongoing U.S.-China rivalry has seen tit-for-tat restrictions on critical mineral exports, highlighting the risks of concentrated supply chains.
• Insufficient Private Sector Participation: The private sector’s involvement in exploration and processing is limited due to unclear policies and high risks.
  • Despite amendments to the Mines and Minerals Act in 2023, auctions for critical mineral blocks failed to attract sufficient private sector interest.
• Environmental and Ethical Concerns in Sourcing: Global mining practices often face scrutiny for human rights violations and environmental degradation.
  • Allegations against Chinese firms in the Democratic Republic of Congo include child labor and forced evictions in cobalt mining operations.

Way forward

• Policy Reforms and Incentives: India needs to accelerate domestic mining and processing capabilities through viability gap funding and increased R&D investments.
  • PSUs and private sectors to be encouraged to actively participate in acquiring mineral assets abroad and/or make financial investments.
• Diversification of Supply Sources: India must reduce its reliance on China by strengthening partnerships with countries in Latin America, Africa, and Australia.
  • The country should explore alternative sources for synthetic graphite, including Mozambique, Madagascar, and Brazil.
• Strengthening Multilateral Engagements: India should take a leading role in global dialogues for equitable access to critical minerals through frameworks like MSP and Quad.
  • Multilateral engagements must focus on building resilient and sustainable supply chains for these vital resources.
• Technological and R&D Collaboration: India should partner with advanced economies like the United States and Japan to acquire cutting-edge refining and recycling technologies.
  • Investments in recycling technologies can help reduce dependency on raw material imports and create a circular economy for critical minerals.
• ESG (environmental, social, and governance) compliance: India must ensure ESG (environmental, social, and governance) compliance in its sourcing practices, especially in partnerships with countries like Congo and South American nations.

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Conclusion

The National Critical Mineral Mission (NCMM) aims to secure India’s critical mineral supply chain, enhance self-reliance, and foster innovation through domestic exploration, recycling, and international acquisitions. By promoting technological advancements, global collaborations, and sustainable practices, NCMM strengthens India’s position in the global critical minerals ecosystem, supporting economic growth and national security.

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