India launches National Critical Mineral Mission with INR 34,300 crore outlay over next 7 years

• NMET to get INR 3,000 cr for critical minerals exploration
  
  
• INR 4,000 cr allotted for Indian firms acquiring assets abroad
  
  

India has launched the "National Critical Mineral Mission" with an outlay of Rs 34,300 crore over the next seven years to build a resilient value chain for critical minerals.

The National Critical Mineral Mission will (a) secure India's critical mineral supply chain by ensuring mineral availability from domestic and foreign sources and (b) strengthen 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. It has been divided into seven areas, with clearly stated outcomes (see box).

Mission aims to boost India's self-reliance in critical minerals

Aligned with the Atmanirbhar Bharat initiative, the National Critical Mineral Mission will help establish an effective framework for India's self-reliance in the critical mineral sector.

India is committed to achieving net-zero emissions by 2070. By 2030, it aims to source at least 50% of its cumulative installed power capacity from non-fossil fuels while cutting CO2 emissions by 1 billion tonnes (bnt) and reducing carbon intensity to below 45%.

Arriving at these targets will require enhanced demand for and production of electric vehicles and wind and solar energy. Minerals such as potash, cobalt, copper, graphite, lithium, manganese, nickel, and rare earth elements (REEs), which are needed for green technologies, telecommunication, nuclear and defence applications, as well India's food security, have been considered "critical" by virtue of their geographical concentration. At least 55% of each of the identified critical minerals is found in only 15 countries that have often been accused of protectionism.

Adopting a whole-of-government approach, the mission will work closely with relevant ministries, public sector undertakings (PSUs), private companies, and research institutions to boost India's self-reliance in this segment.

Key targets

Increasing domestic critical minerals production: More than 100 blocks of critical minerals resources are to be auctioned by FY'31, while government agencies undertake 1,200 exploration projects. A fund of INR 3,000 crore will be allocated for the exploration of critical minerals under the National Mineral Exploration Trust (NMET), and the Geological Survey of India (GSI) is expected to spend INR 4,000 crore separately.

A fast-track regulatory approval process for domestic critical minerals exploration and mining projects will be introduced, and states have been encouraged to expedite various statutory clearances.

Explored offshore blocks of polymetallic nodules and crusts, containing minerals such as cobalt, REE, nickel, and manganese have been put up for auction recently. More are to follow.

The regulatory regime will be relaxed to encourage optimal recovery of critical minerals from various sources such as overburden, tailings, fly ash, red mud, and existing mines. Research and development (R&D) in the beneficiation and processing of critical minerals, mineral reagents, electrolytes, catalysts, bleaching agents, etc., will be fostered. INR 100 crore has been allotted for pilot projects for mineral recovery.

Moreover, as several critical minerals are associated with major ones, the government has proposed a lower revenue share for critical minerals associated with major ones.

To identify and assess all possible minor or associated minerals, which may genetically co-exist with the major minerals being explored, a re-examination of data of already explored areas, preserved rock cores, rock samples, etc. may be required. Ministries will work together to integrate critical mineral data into the National Geoscience Data Repository (NGDR) portal.

Mineral Processing Parks have been proposed with a funding of INR 500 crore by FY'31.

Acquisition of critical mineral assets abroad: The mission will support a mapping and detailed exploration of critical mineral assets in resource-rich countries through the GSI, PSUs, or other Indian entities. The NMET is expected to spend INR 1,600 crore to support critical mineral exploration activities outside India.

PSUs will actively participate in acquiring mineral assets abroad or invest in others that do so, spending (altogether) up to INR 2,500 crore per year. They are also to consider "PSU-led" asset acquisitions with private-sector collaborations. Equity participation by Central Public Sector Undertakings (PSUs) can provide financial support while sharing the risk, fostering a collaborative environment, whereas offtake agreements will secure supply security to Indian manufacturing.

The government has promised targeted subsidies for mining and setting up evacuation infrastructure for Indian companies acquiring assets abroad. An allocation of INR 4,000 crore has been made for such projects from NMET.

Recycling of critical minerals: Separate guidelines/standard operating procedures (SOPs) for the recycling of critical minerals will be formulated to streamline the informal mineral recycling sector. An incentive scheme (pegged at INR 1,500 crore) for mineral recycling clusters shall be prepared. A Recycling Advisory Group will assess the presence of different critical minerals in domestic and imported products and suggest recovery measures.

Strengthening trade, markets: Critical Minerals Partnership Agreements (CMPA) will be signed with resource-rich countries. Critical minerals chapters will be included in existing bilateral/free trade agreements (FTAs) with countries of interest. The government has also promised to harmonise tariffs through bilateral FTAs. It has already eliminated customs duties on most critical minerals in the Union Budget of FY'25, reducing the financial burden on domestic industries and creating a more favourable environment for foreign investment.

Additionally, National Critical Minerals Stockpile/Reserves will be developed through interactions with industry stakeholders and government agencies to guard against supply disruptions. An allocation of INR 500 crore will be made towards this.

Advancing scientific research, technological innovation: The government has promised to support R&D from innovators, start-ups, and enablers by improving coordination among scientific institutions. A fund of INR 500 crore will be made available from the Anusandhan National Research Foundation (ANRF) of the Department of Science and Technology and other R&D schemes. Centres of Excellence (COE) on Critical Minerals will be established and regulations simplified to enhance collaboration among labs and academia.

Developing human resources: Skill Development Centres, with an allocation of INR 100 crore till FY'31, will help prepare the human resources needed. Targeted degree programmes, scholarships, and internships in collaboration with universities and technical institutions will be provided. Capacity-building programmes will be offered to resource-rich countries through GSI, Mineral Exploration and Consultancy Limited (MECL), International Business Machines Corporation (IBM), and Indian institutes and universities.

Developing effective funding, financing, fiscal incentives: The Critical and Strategic Minerals List will be updated through continuous risk and demand assessments. Identification of long-term risks (such as price and demand fluctuations) for critical minerals will be prioritised due to the evolving technology landscape.

A Critical Mineral Traceability system will be developed to enhance the tracking and monitoring of critical minerals in India, to offer transparent information on critical minerals' composition and presence in products, with the broader aim to empower consumers to make informed decisions on the use of critical mineral-intensive products.

Reforms so far

A new list of 24 critical and strategic minerals (Appendix) was added to the Mines and Minerals (Development and Regulation) (MMDR) Act, including 6 minerals - lithium, beryllium, titanium, niobium, tantalum, and zirconium - freed from the protected list of atomic minerals through an amendment.

The Central Government has empowered itself to auction critical and strategic minerals while also introducing a new concession, Exploration Licence (EL), to allow reconnaissance and prospecting of 29 deep-seated minerals, including 23 critical minerals.

Consequently, 24 blocks of strategic minerals have been auctioned. Moreover, KABIL, a joint venture of the Ministry of Mines, has acquired an area of about 15,703 Ha in the Catamarca province of Argentina to explore and mine lithium.