Assessing the Criticality of Non-fuel Minerals in India

Executive Summary:

Critical minerals refer to the mineral resources, both primary and processed, which are essential inputs for the production process of an economy and whose supplies are likely to be disrupted on account of non-availability or risks of unaffordable price spikes. Critical minerals have highly complex global supply chains with a high degree of concentration in the extracting and processing countries resulting in high supply risks. A Planning Commission Workshop Group on Mineral Exploration and Development highlighted the need for assured availability of minerals resources for India’s industrial growth and emphasised the need for R&D and processing of Technology Metals and Energy Critical Minerals. In addition, there must be a clear focus on well-planned exploration and management of already discovered resources.

This discussion note evaluates the India-specific criticality of 11 non-fuel minerals, of which some are deep-seated: chromium, cobalt, copper, iron, limestone, lithium, niobium, heavy rare earth elements, light rare earth elements (REEs), silicon, and strontium. The criticality is assessed along two axes, viz. economic importance and supply risk. The economic importance loosely measures the impact on the national economy of the concerned mineral no longer available in the supply chain while considering the substitutability of the mineral. The supply risk indicator seeks to measure the vulnerability in the global mineral supply chains due to the level of concentration of mineral extraction in some countries and the quality of governance in these jurisdictions. This indicator also considers India’s import reliance, trade partners, and the recycling rates of the minerals.

The analysis suggests that lithium, niobium, and strontium have the highest economic importance, adjusted by their substitutability possibilities. The supply risk, adjusted for the end-of-life recycling rate, is the highest for yttrium and scandium, followed by silicon. India must ensure the uninterrupted supplies of critical minerals through enhanced domestic mineral exploration and extraction and assured sources elsewhere. Particular attention should be given to deep-seated minerals. Import risks of critical minerals may be reduced through developing resilient supply chains, signing trade agreements, and acquiring mining assets abroad. In addition, the government-to-government engagement efforts through KABIL need to be supplemented with the acquisition of private mines.