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In 2023, the Ministry of Mines published a report identifying 30 critical minerals vital for India’s economic progress and national security. While the report highlighted total import dependency for 10 critical and strategic minerals, it did not sufficiently address India’s significant reliance on China. Given China’s dominance in the global mineral resources ecosystem, this dependency raises strategic vulnerabilities and underscores the urgent need for diversifying mineral supply chains.
What Are Critical Minerals?
Critical minerals are rare raw materials essential for economic and national security, especially in high-tech industries, renewable energy, and the mining industry. Their unique properties and limited global production make them vulnerable to supply chain disruptions. As the global transition to green energy accelerates, the demand for these natural minerals has surged. Securing a stable supply is critical for nations striving for economic stability and technological leadership.
China’s Dominance in Critical Minerals
China holds significant control over global critical raw materials, bolstered by:
- Vast Resources: It has identified 173 types of earth minerals, including energy, metallic, and non-metallic minerals.
- Strategic Investments: With $19.4 billion spent on exploration in 2023, China discovered 132 new mineral deposits, including 34 large ones.
- Processing Capabilities: China dominates the processing of rare earth elements (87%), lithium (58%), and silicon (68%).
- Global Mining Projects: China’s investment in mining sector projects worldwide solidifies its control over mineral resources supply chains.
China’s Export Strategy
China employs targeted export restrictions to maintain its dominance in rare metals and strategic minerals:
- 2010 Rare Earth Minerals Embargo on Japan.
- Recent restrictions on gallium, germanium, and antimony exports.
- A ban on rare earth technologies to safeguard domestic interests.
India’s Dependency on China
Between 2019 and 2024, India’s reliance on China’s critical minerals for sectors like renewable energy, defense, and mineral processing remained evident:
- Bismuth (85.6%): Pharmaceuticals and chemicals.
- Lithium (82%): EV batteries and energy storage.
- Silicon (76%): Semiconductors and solar panels.
- Graphite (42.4%): Key for EV batteries and steelmaking.
China’s dominance in these strategic critical and essential minerals highlights India’s supply chain vulnerabilities in mineral investments.
Challenges Hindering India’s Self-Sufficiency
- Technological Barriers: Limited capability to extract minerals like lithium from domestic clay deposits.
- Investment Gaps: Insufficient private sector participation in mining industry projects.
- Policy Shortcomings: Weak incentives and outdated regulations slow mineral exploration and rare metals mining in India.
Strategic Way Forward
India aims to reduce dependency through strategic initiatives:
- Securing Overseas Assets: Organizations like KABIL are acquiring international critical mineral resources.
- International Collaborations: Partnerships like the Minerals Security Partnership foster a diversified supply of minerals for energy transition.
- Technological Development: Institutions like CSIR and the GSI are advancing mineral processing capabilities.
- Promoting Circular Economy: Recycling rare earth materials to minimize dependency.
- Policy Reforms: Enhanced incentives for private investment in domestic mining sector news.
Conclusion
India’s path toward reducing reliance on China for critical minerals is an intricate one, demanding sustained investment, cutting-edge technologies, and global partnerships. By fostering a self-reliant mineral resources limited ecosystem, India can ensure resilience in critical mineral supply chains while strengthening its stance in the global mining industry overview.
What are critical minerals?
Critical minerals are raw materials essential for economic growth and national security. They are integral to high-tech industries, renewable energy technologies, and advanced manufacturing.
Why are critical minerals important for India?
Critical minerals are vital for India’s economic development, defense, energy security, and technological advancements, particularly in sectors like renewable energy and electric vehicles.
What challenges does India face in critical mineral procurement?
India faces challenges such as import dependency, limited domestic extraction and processing capabilities, lack of investment, and outdated mining regulations.
What is India’s current strategy to secure critical minerals?
What are critical minerals?
Critical minerals are raw materials essential for economic growth and national security. They are integral to high-tech industries, renewable energy technologies, and advanced manufacturing.
Why are critical minerals important for India?
Critical minerals are vital for India’s economic development, defense, energy security, and technological advancements, particularly in sectors like renewable energy and electric vehicles.
What challenges does India face in critical mineral procurement?
India faces challenges such as import dependency, limited domestic extraction and processing capabilities, lack of investment, and outdated mining regulations.
Why does India rely on China for critical minerals?
India depends on China due to its global dominance in mineral processing and production, coupled with India’s limited domestic capabilities in extraction and processing.
What are the primary critical minerals India imports from China?
Key minerals imported from China include bismuth, lithium, silicon, titanium, tellurium, and graphite, which are essential for industries such as pharmaceuticals, EV batteries, and solar panels.
How much of India’s critical minerals supply comes from China?
India relies heavily on China, with percentages varying for minerals like bismuth (85.6%), lithium (82%), silicon (76%), and graphite (42.4%).
How does China dominate the global critical minerals market?
China controls significant reserves, invests heavily in mineral exploration, leads in processing technologies, and strategically manages exports to influence global supply chains.
What actions has China taken to restrict critical mineral exports?
China has implemented embargoes and restrictions, such as banning the export of certain rare earth technologies and limiting the supply of minerals like gallium and germanium.
How does China’s mineral dominance impact global markets?
China’s dominance creates supply chain vulnerabilities for countries relying on critical minerals for advanced industries, making them susceptible to supply disruptions and price fluctuations.
Why is India struggling to utilize its domestic mineral resources?
India faces technological and policy challenges, including outdated regulations, insufficient private sector participation, and limited capabilities to process complex mineral deposits.
What are India’s untapped critical mineral reserves?
India has reserves like 5.9 million tonnes of lithium in Jammu & Kashmir but lacks the technology and investment needed for effective extraction and processing.
What reforms can help India boost domestic production?
Reforms include providing incentives for private sector investment, adopting advanced mining technologies, and strengthening the regulatory framework for exploration and production.
What is KABIL, and how does it support India’s mineral security?
KABIL (Khanij Bidesh India Limited) is a government initiative focused on acquiring overseas mineral resources to diversify India’s critical mineral supply.
How does recycling help reduce dependency on critical mineral imports?
Recycling initiatives can create a circular economy by recovering valuable materials from waste, reducing reliance on imported raw materials and minimizing environmental impact.
What role do international partnerships play in India’s mineral strategy?
Collaborations like the Minerals Security Partnership enable India to access diverse resources, share technologies, and reduce dependency on single suppliers like China.
What is the impact of India’s dependency on China for critical minerals?
Dependency increases supply chain vulnerabilities, impacting economic stability and national security. It can also hinder technological progress and the transition to green energy.
How does China’s critical mineral strategy affect India?
China’s export restrictions and dominance in the supply chain can lead to supply disruptions for India, affecting industries like renewable energy, electronics, and defense.
What steps can India take to reduce its dependency on China?
India can focus on domestic production, explore international collaborations, invest in advanced mining technologies, and promote recycling to diversify its supply chains.
Why are critical minerals essential for renewable energy?
Critical minerals are key components in renewable energy technologies, such as wind turbines, solar panels, and EV batteries, which are crucial for a sustainable energy transition.
Source: India’s reliance on China for critical minerals | Explained