RECENT DEVELOPMENTS

• Big Discovery: Lithium reserves found in Reasi, Jammu in 2023.
• June Announcement: Winning bidders for mining rights in six blocks of critical minerals, including graphite, phosphorite, and lithium, were declared. These are the first private players awarded such rights under the revamped Mines and Minerals law.

IMPORTANCE OF CRITICAL MINERALS

• Essential for Green Transition: Critical minerals like lithium, copper, cobalt, and graphite are vital for cleaner energy.
• Rising Demand: Lithium demand rose by 30% in 2023, with other minerals seeing 8-15% growth. By 2040, demand for copper is expected to rise by 50%, nickel, cobalt, and rare earth elements to double, graphite to quadruple, and lithium to increase eightfold.
• Import Dependence: India relies heavily on imports for these minerals, with 95% of copper needs being imported.

STEPS TO SPUR PRODUCTION

• Natural Reserves: India has untapped reserves of some minerals.
• Lucky Discoveries: Lithium reserves in Jammu and Kashmir (5.9 million tonnes) discovered during limestone exploration.
• Legislative Changes: Mines and Minerals (Development and Regulation) Act amended to allow mining concessions for 24 critical and strategic minerals.
• Auction Initiatives:
  • First auctions of 20 critical mineral blocks, including lithium in J&K, started in November.
  • Auctions faced low interest, with most first 20 blocks scrapped due to lack of bidders.
  • Six winners announced from the first tranche for blocks in Odisha, Tamil Nadu, U.P., and Chhattisgarh.
  • Ongoing auctions and new tranches are being initiated.

CHALLENGES IN THE AUCTION PROCESS

• Lack of Data: Insufficient data on potential reserves affects miner interest.
• Technology Hurdles: For example, untested technology for lithium extraction from clay in J&K.

FUTURE PROSPECTS

• Commercial Production Timeline: Full benefits from domestic blocks unlikely before 2030.
• Supply Chain Security: India is looking to acquire overseas assets to ensure mineral security.
• International Collaborations: India joined the U.S.-led Mineral Security Partnership for better access and cooperation.

KEY INSIGHTS

• Global Supply Dominance: China is a major supplier or processor of critical minerals.
• Domestic Exploration: Efforts to explore and commercialize domestic reserves are ongoing but face significant challenges.
• Strategic Moves: Overseas acquisitions and international partnerships are crucial for India’s mineral security strategy