The Ministry of Mines is designing a Production Linked Incentive (PLI) scheme to promote the recycling of critical minerals in India.

Status of the PLI scheme

• The PLI scheme is yet to be finalized. 

What are critical minerals?

• Critical minerals are the minerals essential for economic growth and national security.
• If these minerals aren’t available or are concentrated in a few places, it can create vulnerabilities in supply chains.

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Significance of critical minerals for India

• Economic Growth and Industrial Development

  • Resource Base: Critical minerals are vital raw materials for industries like electronics, automotive, aerospace, and renewable energy.
  • Manufacturing: They are essential in making semiconductors, batteries, and magnets.

• National Security and Strategic Importance

  • Defense Sector: Critical minerals are indispensable for defense technologies such as missile guidance systems and radar.
  • Reducing Dependence: Developing local sources of these minerals can reduce India’s dependence on imports from politically sensitive regions.

• Transition to Clean Energy

  • Renewable Energy: Minerals like lithium, cobalt, and rare earth elements (REEs) are crucial for EV batteries and renewable energy storage.
    • Access to these minerals helps India reduce carbon emissions and adopt cleaner energy sources.

• Technological Advancements

  • Innovation: Critical minerals drive innovations in technologies like 5G networks and advanced medical devices.
    • A strong supply chain promotes research and development in cutting-edge technologies.

• Job Creation and Skill Development

  • Mining and Processing: Developing critical mineral resources creates jobs and enhances skills.
    • This includes both mining operations and processing facilities.

About PLI Scheme for Recycling Critical Minerals

• The PLI scheme will focus on recycling e-waste, also known as “urban mining,” to recover important minerals.
  • The proposed PLI scheme aligns with recommendations from NITI Aayog.
  • The rules complement the Battery Waste Management Rules (BWMR), 2022.
    • BWMR, 2022 requires phased recycling of used EV lithium-ion batteries.
      • Recycling of these batteries will start gradually from 2026.
• Objective: To foster a circular economy and strengthen domestic supply chains. 
• Key minerals to be targeted include lithium, copper, cobalt, graphite, chromium, and silicon.
  • These minerals are essential for:
    • Clean energy technologies like solar PV modules and wind turbines
    • Energy storage systems and electric vehicles (EVs)
    • Consumer electronics

Benefits of Recycling minerals

• Reducing Mining Needs: Research shows that effectively recycling critical minerals can greatly reduce the need for new mining activities.
• Environmental Conservation: Recycling helps conserve the environment and avoid the social and economic impacts of opening new mines.

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Challenges of PLI Scheme for Recycling Critical Minerals

• Disagreements on Beneficiaries

  • High-Purity Extraction: Some recyclers believe only those who extract high-purity critical minerals, similar to virgin ores, should be rewarded by the scheme.
  • Black Mass Production: Others argue the scheme should also support the production of “black mass,” a less pure mixture of minerals from shredded e-waste. 
    • Most Indian recyclers currently can’t extract battery-grade minerals from black mass.

• India’s Growing E-Waste Problem

  • Increase in E-Waste: The amount of e-waste in India is increasing rapidly due to the growth of solar panels, wind turbines, and electric vehicles (EVs).
  • Projections: By 2030, India is expected to have:
    • 340,000 tonnes of solar panel waste (up from 100,000 tonnes in 2023)
    • 500,000 tonnes of used EV batteries needing recycling