Critical minerals are those minerals which are essential for economic development and national security, the lack of which, may lead to supply chain vulnerability and disruption.
The November 2022 expert committee was initiated to fill the policy gap, identify and develop value chains for the minerals which are critical to our country.
The Centre on Wednesday (28 June) released a list of thirty critical minerals that it considers essential for economic development and national security of the country.
The list of thirty critical minerals, was identified in a report titled “Report of the Committee on Identification of Critical Minerals” prepared by an expert team constituted by the Ministry of Mines last November.
What Is A Critical Mineral
One of the definitions cited in the report suggest that a mineral is labelled as critical when the risk of supply shortage and associated impact on the economy is (relatively) higher than the other raw materials.
This definition of a critical mineral was adopted in the US (Executive Order No.13817) and the subsequent legislation that resulted from the analysis.
The European Union (EU) also carried out a similar exercise and categorised critical minerals based on two main parameters — economic importance and supply risk.
Australia refers to critical minerals as: “metals, non-metals and minerals that are considered vital for the economic well-being of the world’s major and emerging economies, yet whose supply may be at risk due to geological scarcity, geopolitical issues, trade policy or other factors”.
Put simply, the report defines critical minerals as “those minerals which are essential for economic development and national security, the lack of availability of these minerals or even concentration of existence, extraction or processing of these minerals in few geographical locations may lead to supply chain vulnerability and disruption“.
In India, some effort have been made in the past, both by the government as well as think-tanks, to identify the minerals that are critical for the country:
- An early initiative in this direction came from the Planning Commission of India (now NITI Aayog) in 2011 which highlighted the need for the assured availability of mineral resources for the country’s industrial growth.
The report analysed 11 groups of minerals under categories such as metallic, non-metallic, precious stones and metals, and strategic minerals.
- In 2016, the Department of Science and Technology (DST), in collaboration with the Council on Energy, Environment and Water (CEEW), drafted the Critical Minerals Strategy for India in 2016. The study identified 13 minerals that would become most critical by 2030.
- The Centre for Socio and Economic Progress (CSEP), another prominent public policy think tank, has worked extensively in identifying the list of critical minerals for India.
In a recent publication, the CSEP evaluated the criticality of 43 non-fuel minerals in India based on two dimensions: economic importance for the Indian economy and supply risks.
Why A New Exercise
In November 2022, the Ministry of Mines constituted a seven-member Committee headed by joint secretary (Policy) to identify the list of minerals critical to our country.
The country needs vast amounts of these minerals for meeting its requirements for energy transition and net-zero commitments. Similarly, certain other elements are critical for progress in electronics, defence and agriculture sector.
One of the key challenges in the critical mineral supply chain lies in the global market dynamics, which can result in price volatility and supply disruptions.
However, in the absence of a list of minerals critical for the country, it has been difficult to formulate policy measures to secure the country from supply chain vulnerability of these minerals.
As such, the November 2022 exercise to form an expert committee was initiated to fill the policy gap and identify and develop value chains for the minerals which are critical to our country.
The Committee carried out a three-stage assessment for identifying the minerals critical to India.
- In the first stage, the critical mineral strategies of various countries as well as studies by CSEP and CEEW were analysed.
Accordingly, a total of 69 elements/minerals that were considered critical by major global economies such as Australia, USA, Canada, UK, Japan and South Korea were identified for further examination.
- In the second stage of assessment, an inter-ministerial consultation was carried out with different ministries to identify minerals critical to their sectors. This included consultation with Ministry of Power, Department of Atomic Energy, Ministry of New and Renewable Energy, Department of Fertilisers and NITI Aayog, among others.
- The third stage assessment was to derive an empirical formula for identifying the list of critical minerals. The committee took stock of the EU methodology that considers two major factors — economic importance and supply risk.
- Based on the three-stage assessment process mentioned above, a total of 30 minerals have been found to be most critical for India out of which two minerals are critical as fertiliser minerals.
The elements/minerals selected as critical (see the image below) have either high economic importance, high supply risk, or have both parameters high.
Most of the countries in the world have identified critical minerals as per their national priorities and future requirements.
- The United States Geological Survey has released a list of 50 mineral commodities critical to the US economy in the year 2022.
- A total of 18 minerals have been identified as critical to the United Kingdom (UK) economy.
- The European Commission, which has been issuing a list of critical raw minerals (CRM) since 2011, has identified a total of 34 raw materials as CRM in the most recent list published in 2023.
- In March 2020, Japan identified a set of 31 minerals as critical for their economy.
- The latest critical mineral strategy released by Australia in 2022 defines a set of 26 minerals critical for Australia.
Apart from identifying the critical minerals list, the report also recommends measures for capacity building in the emerging sector of critical minerals.
- Establishing a ‘National Institute’ or ‘Centre of Excellence on Critical Minerals’ on the lines of Commonwealth Scientific and Industrial Research Organisation (CSIRO). CSIRO is the largest minerals research and development organisation in Australia and one of the largest in the world.
- Creation of a Centre of Excellence for Critical Minerals (CECM) in the Ministry of Mines which will focus on identifying more efficient ways for discovering next generation critical mineral deposits through geological knowledge, data analytics and modelling, and machine learning capability.
- Apart from this, the CECM may collaborate with other agencies for the strategic acquisition of foreign assets on critical minerals.
- The Centre of Excellence will periodically update the list of critical minerals for India, preferably every three years, and notify the critical mineral strategy from time to time.
- The central government should provide financial and administrative support to accelerate the development of critical mineral mining, processing, manufacturing, and recycling in the country.