NCMM furthers India’s mineral security agenda but can funding, tech adoption match intent?

• In Perspective
  • Background: The National Critical Minerals Mission (NCMM) aims to enhance India’s mineral security by addressing supply chain vulnerabilities, especially those exacerbated by China’s dominance.
  • Key Objectives:
    • Enhance Domestic Production: Auction over 100 critical mineral blocks, undertake 1,200 exploration projects.
    • Secure Overseas Assets: Empower KABIL to acquire foreign assets (e.g., lithium exploration in Argentina).
    • Promote Recycling: Target 400 kilotonnes of materials through streamlined guidelines and incentives.
    • Strengthen Trade Partnerships: Engage in the Mineral Security Partnership, Quad’s clean energy supply chain principles.
    • Advance R&D: Establish three Centres of Excellence, file 1,000 patents.
    • Develop Human Capital: Invest in skill development programs for the minerals sector.
    • Mobilise Financing: Secure adequate funding for the entire value chain.
• Addressing Historical Gaps:
  • Under-Exploration: Only 10% of India’s OGP has been explored, compared to 20-25% in advanced economies. The NCMM aims to accelerate exploration and licensing.
  • Over-reliance on Imports: The mission seeks to diversify supply sources through offshore mining and partnerships with resource-rich nations.
• Concerns and Limitations:
  • Inadequate Funding: The NCMM’s allocation of Rs 34,300 crore over seven years is insufficient compared to global investments (e.g., US Inflation Reduction Act, EU’s Critical Raw Materials Act).
  • Technological Deficiencies: India lacks advanced capabilities in extracting and processing minerals like lithium from clay deposits or recovering rare earths from e-waste.
  • Limited Private Sector Engagement: The NCMM lacks robust incentives to attract private investment in exploration and mining projects.
• China’s Dominance:
  • Control over Value Chain: China dominates critical mineral reserves, processing, and refining, controlling 87% of rare earth processing, 58% of lithium refining, and 68% of silicon processing.
  • Strategic Investments: China’s strategic investments in overseas mining projects and midstream refining capabilities pose a significant challenge to global supply chains.
• Recommendations:
  • Increase Funding: Significantly increase the NCMM’s budget to match global investment levels.
  • Prioritize Technology Development: Invest heavily in R&D, technology transfer, and collaboration with global leaders in mineral extraction and processing.
  • Incentivize Private Sector Participation: Offer attractive incentives such as tax rebates and risk-sharing mechanisms to encourage private investment.
  • Develop Domestic Processing Capabilities: Focus on developing domestic refining capacities for critical minerals like lithium, graphite, and silicon to reduce reliance on China.

Conclusion:

The NCMM is a crucial step towards securing India’s mineral future. However, addressing the limitations in funding, technology, and private sector engagement is critical for the mission’s success. By proactively addressing these challenges, India can transition from a reactive importer to a resilient player in the global critical minerals landscape.