Critical minerals, the foundation of strategic power

Source: The post “Critical minerals, the foundation of strategic power” has been created based on “Critical minerals, the foundation of strategic power” published in “The Hindu” on 4 July 2026. Critical minerals, the foundation of strategic power.

UPSC Syllabus: GS 3 – Economy

Context: Critical minerals such as lithium, cobalt, nickel, graphite, copper, and rare earth elements (REEs) are essential for electric vehicles, renewable energy, semiconductors, defence, artificial intelligence, and advanced manufacturing. As decarbonisation and digitalisation accelerate, critical mineral security has become as strategically important as oil security once was.

Importance of Critical Minerals

1. Critical minerals form the backbone of clean energy technologies, battery storage systems, renewable power generation, and electronics manufacturing.
2. They are indispensable for the production of semiconductors, defence equipment, aerospace technologies, and advanced manufacturing.
3. They are essential for achieving India’s clean energy transition, industrial development, and strategic autonomy.

Global Challenges in Critical Mineral Supply

1. Concentrated Global Supply Chains

1. The global supply chain is highly concentrated, as the top three refining countries account for 86% of the refining capacity of major critical minerals.
2. China dominates the global value chain by refining 19 out of 20 strategic minerals and holding an average market share of about 70%.

2. Rising Demand and Supply Deficits

1. The demand for critical minerals is increasing rapidly, while copper is projected to face a 30% supply shortfall by 2035.
2. Lithium is expected to witness supply deficits by the 2030s, while demand for rare earth elements will continue to rise with the expansion of wind energy and electronics.

3. Growing Geopolitical Risks

1. China’s rare earth export controls announced in 2025 have highlighted the geopolitical risks associated with concentrated supply chains.
2. The European Union and the United States are diversifying their supply chains and strengthening domestic processing capacities to reduce dependence on a single country.

India’s Position

1. Growing Demand

1. India’s demand for critical minerals is expected to increase significantly due to the expansion of clean energy, electric mobility, and advanced manufacturing.
2. Under the Net Zero scenario, India’s cumulative demand for critical energy transition minerals could reach 169 million tonnes by 2070, which is about 51% higher than the current policy pathway.

2. Domestic Resource Potential

1. India possesses substantial reserves of cobalt (44.9 million tonnes), copper (163.9 million tonnes), graphite (211.6 million tonnes), nickel (189 million tonnes), and monazite deposits containing rare earth oxides.
2. Recycling has the potential to meet up to one-fourth of India’s copper and graphite demand by the middle of the century.
3. Despite having domestic reserves, India continues to depend heavily on imports for lithium, cobalt, and nickel.

Challenges Faced by India

1. Import Dependence: India remains heavily dependent on imports for several critical minerals, making its supply chains vulnerable to external disruptions.
2. Limited Processing and Refining Capacity: India has limited processing and refining capacity, particularly for high-purity critical mineral products, which restricts domestic value addition.
3. China’s Dominance: China processes over 90% of rare earths and graphite, nearly 75% of cobalt, and around 70% of lithium chemicals, exposing India to major supply chain risks.
4. Inadequate Exploration: Mineral exploration in India remains relatively shallow, limiting the identification and development of domestic mineral resources.
5. Regulatory Bottlenecks: Environmental and regulatory clearances are often time-consuming, resulting in delays in mining and processing projects.
6. Limited Private Sector Participation: Private investment remains constrained due to geological uncertainties, high investment risks, and challenging project economics in remote regions.
7. Weak Recycling Ecosystem: Recycling infrastructure remains underdeveloped because of inadequate feedstock, collection systems, and technological limitations.

Government Initiatives

1. The Government has identified 30 critical minerals and strengthened the regulatory framework since 2023.
2. The National Critical Mineral Mission aims to undertake 1,200 domestic exploration projects, produce at least 15 critical minerals, and acquire 50 overseas mining assets by 2030–31.
3. Khanij Bidesh India Limited (KABIL) has secured 15,703 hectares in Argentina’s Catamarca Province for lithium exploration.
4. The Union Budget 2026–27 has proposed rare earth corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu.
5. The India–US Critical Minerals and Rare Earths Framework (May 2026) seeks to strengthen bilateral cooperation and diversify supply chains.

Way Forward

1. Strengthen Domestic Capabilities

1. India should prioritise the development of domestic processing and refining capacity through targeted incentives and supporting infrastructure.
2. The Government should strengthen geological exploration by improving the availability of reliable geological data and modern exploration technologies.

2. Improve Policy and Investment Environment

1. Regulatory approvals should be made faster and more predictable to encourage timely investments.
2. Greater private sector participation should be promoted through risk-sharing mechanisms and policy support.

3. Enhance Strategic Security

1. India should establish strategic stockpiles of critical minerals to improve resilience against global supply disruptions.
2. Investment in research and development should be enhanced to improve extraction, processing, and recycling technologies.
3. India should diversify overseas mineral sourcing through trusted international partnerships and overseas mining acquisitions.
4. Recycling should be integrated into long-term mineral supply planning with measurable implementation targets.
5. A coordinated institutional framework with mineral-specific risk thresholds and clear milestones should be established to ensure long-term mineral security.

Conclusion: Critical mineral security will determine India’s success in the clean energy transition, semiconductor manufacturing, defence production, and industrial growth. India must convert its mineral potential into strategic capability through sustained implementation, stronger processing capacity, diversified supply chains, and coordinated policy action to reduce long-term strategic vulnerabilities.

Question: Critical mineral security has become central to India’s industrial growth, clean energy transition, and strategic autonomy. Discuss the challenges faced by India in securing critical minerals and suggest measures to strengthen mineral security.

Source: The Hindu