Critical Minerals for a Green Future

Why in News?

• As India is set to host the G20 Leaders’ Summit in New Delhi, there is a growing consensus on the importance of critical minerals for the clean energy transition.
• The meet could consolidate India's efforts to secure critical minerals' supply chains.

Critical Minerals and Materials

• A mineral is critical when the risk of supply shortage and associated impact on the economy is (relatively) higher than other raw materials.
• These minerals are essential for economic development and national security, and their lack of availability/ the concentration of extraction/ processing in a few geographical locations could potentially lead to supply chain vulnerabilities.
• These (such as lithium, graphite, cobalt, titanium, and rare earth elements [REE]) are essential for the advancement of many sectors, including high-tech electronics, telecommunications, transport, and defence.

Significance of Critical Minerals and Materials

• Important for Nation’s Economic and National Security
  • Critical minerals are important to a nation’s economic and national security and have no viable substitutes.
  • Critical minerals such as cobalt, lithium, silicon, graphite, and REE are used in clean technologies like solar modules, wind turbines, and batteries.
• Building Blocks of Modern Civilisation
  • The deployment of these technologies can help meet India’s sustainability targets of 500 GW of non-fossil power capacity by 2030 as well as the emissions-intensity target of 45 per cent below 2005 levels by 2030.
  • Therefore, these minerals can be termed as the building blocks of modern civilisation.

Why Establishing a Reliable Supply Chain for Critical Minerals is Important for India

• The Growing Demand for Clean Technology
  • The growing demand for clean technologies has led to an uptick in global mining of various critical minerals.
  • According to the Union Ministry of Mines, the annual production of key minerals such as lithium, REE, and cobalt registered an increase of 240 per cent, 134 per cent, and 67 per cent respectively, between 2016 and 2022.
• To Reduce Import Dependency and Create a Domestic Value Chain
  • Global supply chains of critical minerals are complex and can be vulnerable to unforeseen disruptions caused by the vagaries of trade treaties, geopolitical factors.
  • Therefore, securing the supply chain of critical minerals is important for reducing India’s import dependence, strengthening national security, and developing a domestic value chain to cater to the growing demand.

Steps Taken by the Government for Growth of The Domestic Critical Minerals Sector

• Exploration, Processing, Use and Recycling: To fulfil the vision of Atmanirbhar Bharat, the government is committed to the growth of the domestic critical minerals sector with a focus on exploration, processing, use and recycling.
• Policy Reforms: Some policy reforms have been undertaken through key amendments to the Mines and Minerals (Development & Regulation) Act, 1957 in 2015, 2020, 2021, and recently in 2023.
• New Auction Regime
  • To increase the domestic source of production, the Ministry of Mines came up with a new auction regime in 2015.
  • This envisaged the granting of mining licences and composite licences for mine development through a transparent and time-bound process. 
• Collaboration Between Public and Private Sector
  • The National Mineral Exploration Trust (NMET) is supporting the exploration of critical minerals with private agencies being empanelled to receive funding for such activities.
  • The MMDR Amendment Act, 2023 also facilitates mining by including a provision of Exploration Licenses (EL) for deep-seated and critical minerals. It also omitted six minerals including lithium, from the list of 12 atomic minerals.
  • The MMDR Amendment Act, 2023 empowers the central government to auction mines and promote production of 26 crucial minerals in India rapidly.
• Cooperative Federalism
  • The central government has taken the responsibility to exclusively auction concessions related to 24 critical minerals, while making sure that the revenues accrue to the concerned state governments.
  • This measure will improve the revenue receipts of state governments, giving a healthy boost to their fiscal position.

Outcome of G20 Energy Transitions Ministers’ Meeting Under India’s Presidency

• Share, Collaborate and Build
  • The outcome document highlights the aim to share, collaborate and build on the sense of responsibility.
  • Further it emphasises solidarity amongst the G20 members in accelerating the clean, sustainable, just, affordable, and inclusive energy transitions.
  • This can be achieved by following various pathways, as a means of enabling secure, sustainable, equitable, shared, and inclusive growth.
• Energy Security and Diversified Supply Chains
  • The document highlighted the importance of ensuring that the growing global energy demand is matched by sustainable and affordable energy supplies.
  • The nations affirmed their commitments to aim to advance technological collaboration and cooperation amongst G20 members, other international partners, and multilateral institutions.
  • This will strengthen energy systems with a view to ensuring energy security and stabilizing energy markets.
• Universal Energy Access
  • That access to affordable, reliable, sustainable, and modern energy for all is a moral imperative and a basic human need.
  • The countries have committed to expand on the achievements of previous G20 Presidencies and take actions to pursue shared objectives of attaining SDG7(Affordable and Clean Energy) targets through enhancing international cooperation and investment in technologies.
  • This will accelerate progress on clean cooking, electricity access and eradicating energy poverty, providing support for all sections of society to ensure that no one is left behind.

Way Forward

• International Collaboration: Apart from strengthening domestic mechanisms, collaborative international efforts through multilateral and bilateral engagements can help in building a resilient critical minerals value chain.
• Collective Action
  • Collective action is important to achieve the targets and the government is forming new partnerships and alliances related to critical minerals.
  • These include India’s entry into the Minerals Security Partnership(MSP),the Australia-India Economic Cooperation and Trade Agreement (ECTA) and the efforts of Khanij Bidesh India Ltd (KABIL) to seek mineral acquisition opportunities in countries like Chile and Argentina.

Conclusion

• The government’s vision of One Earth, One Family, One Future under its G20 presidency, highlights the importance of our shared goals related to emission reduction and climate change mitigation for a shared future.
• The groundwork laid down during India’s G20 presidency will strengthen India’s work on critical minerals, with India taking a leadership role.

Q1) What is the Mineral Security Partnership (MSP)?

The MSP, comprising 14 member states including Australia, Canada, Japan, and the United Kingdom, serves as a strategic alliance aimed at catalysing public and private investment in global critical mineral supply chains.

Q2) What is Khanij Bidesh India Ltd. (KABIL)?

It is a Joint Venture Company among NALCO, HCL and MECL formed in 2019. Target of this company is to identify, acquire, develop, process and make commercial use of strategic minerals in overseas locations for supply in India.

Source: The Indian Express