India’s pursuit of a clean energy transition and sustainable growth hinges on securing critical minerals like lithium, cobalt, and Rare Earth Elements (REEs). These minerals are central to technologies such as electric vehicles (EVs), solar panels, wind turbines, and energy storage systems, making them indispensable for achieving India’s renewable energy and net-zero targets. As the country targets 500 GW of renewable energy by 2030 and net zero emissions by 2070, a secure supply of critical minerals is vital.

Importance of Critical Minerals in India’s Green Transition

Critical minerals play a pivotal role in India’s energy and industrial landscape:

• Lithium and cobalt: Key components for EV batteries. India’s EV market is projected to grow at a 49% CAGR from 2023 to 2030.

• REEs: Essential for permanent magnets used in wind turbines, EV motors, and electronics.

• Battery storage: The market was valued at $2.8 billion in 2023, expected to surge with renewable energy adoption.

Challenges:

• India imports nearly 100% of lithium, cobalt, and nickel, and over 90% of REEs, exposing the country to supply chain vulnerabilities.

• Geopolitical risks and global competition, particularly from China, which controls 60% of REE production and 85% of processing capacity, make self-reliance urgent.

Untapped Mineral Potential and Exploration Efforts

India holds significant untapped resources:

• Lithium: Jammu & Kashmir and Rajasthan.

• REEs: Odisha and Andhra Pradesh.

• Graphite: Bihar and Karnataka.

Government initiatives:

• National Mineral Exploration Policy (NMEP), 2016: Encourages private sector participation and advanced geophysical surveys.

• Mines and Minerals (Development and Regulation) Act, 2021: Supports private exploration.

• Recent auctions: 20 critical mineral blocks (lithium, graphite, REEs) attracted Indian and multinational investors.

Need for processing: India contributes less than 1% of global REE production. Public-private partnerships can accelerate refining capacity and recycling infrastructure.

Investment in Mines

Investment in domestic mining is critical:

• Policy reforms: Mines and Minerals (Development and Regulation) Amendment Act, 2023 opened private exploration.

• Challenges: High costs, regulatory hurdles, environmental concerns. Mining contributed only 2.5% of GDP compared to 13.6% in Australia.

Government initiatives:

• National Critical Mineral Mission (NCMM): ₹34,300 crore plan to strengthen value chains.

• State-backed companies: NMDC, IREL India Limited, and KABIL expanding domestic and overseas projects.

Incentives needed: Production-linked subsidies, tax breaks, and research grants to scale mining and processing.

Circular Economy and Recycling

A sustainable clean energy transition requires modernised infrastructure and recycling:

• India generates ~4 million metric tonnes of e-waste annually, but only 10% is formally recycled.

• Battery Waste Management Rules, 2022: Set recycling targets but require better implementation.

• Upgrading mining and processing infrastructure, mechanisation, and public-private recycling hubs can:

  • Recover critical minerals.

  • Reduce import dependence.

  • Minimise environmental impact.

Way Forward

To achieve its clean energy ambitions, India should:

• Fast-track exploration and operationalisation of mining leases.

• Invest in domestic mines and advanced recycling technologies.

• Promote urban mining and circular economy initiatives.

• Strengthen public-private partnerships and R&D to cut import dependence.

• Enhance policy clarity and state support for critical mineral projects.

A robust mineral ecosystem will enable India to lead in EVs, solar, and energy storage, creating jobs, fostering innovation, and positioning the country as a green economy leader.

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