How G20 will strengthen India’s building blocks

Source: The post is based on the article “Union Minister Pralhad Joshi writes: How G20 will strengthen India’s building blocks– The meet could consolidate India’s efforts to secure critical minerals’ supply chains” published in “The Indian express” on 8th September 2023.

Syllabus: GS1- Geography- natural resources & GS2- International relations – global grouping

News: The article discusses the importance of critical minerals like lithium, cobalt, and rare earth elements for clean energy technologies. Global demand for these minerals has increased, but their supply chains can be unstable due to politics, trade, or natural events. India is focusing on enhancing its own production and supply of these minerals to reduce dependence on imports. The government has made policy changes to encourage mining and has formed international partnerships for mineral security.

What are Critical minerals?

Definition: Vital elements essential for modern technologies and clean energy transition.

Examples: Cobalt, lithium, silicon, graphite, and rare earth elements (REE).

Uniqueness: They have no viable substitutes, making them indispensable.

Applications: Foundational for technologies such as solar modules, wind turbines, and batteries.

Growing Demand:  Key to the global shift towards green energy solutions.

Supply Chain Vulnerability: Influenced by trade policies, geopolitics, and natural events.

Importance for India: Essential not just for economic growth but also national security.

Why are critical minerals important?

Clean Energy Technologies: Critical minerals like cobalt, lithium, and rare earth elements are fundamental for green solutions.

Sustainability Targets: They play a key role in helping India achieve 500 GW of non-fossil power capacity by 2030.

Emission Reduction: These minerals support India’s goal of reducing emissions intensity to 45% below 2005 levels by 2030.

Economic Growth: These minerals are essential for national economic health and security.

No Substitutes: They have no viable alternatives, making them indispensable.

Tech Applications: Used in devices like solar modules, wind turbines, and batteries.

Global Demand Surge: From 2016 to 2022, the production of lithium grew by 240%, rare earth elements by 134%, and cobalt by 67%.

Modern Civilization: Termed as building blocks for today’s society.

What efforts has India made to secure its future?

Focus on Critical Minerals: Recognizing their importance in clean technologies like solar modules, wind turbines, and batteries.

Policy Reforms: Amended the Mines and Minerals (Development & Regulation) Act, 1957 in 2015, 2020, 2021, and 2023 to bolster the domestic critical minerals sector.

New Auction Regime: Initiated in 2015, this system grants mining and composite licenses transparently and promptly.

Encouraging Exploration: The National Mineral Exploration Trust (NMET) supports the exploration of critical minerals. Private agencies are funded for these activities.

Provisions for Deep-Seated Minerals: The 2023 Act amendment included Exploration Licenses (EL) specifically for deep-seated and critical minerals.

International Partnerships: India joined the Minerals Security Partnership and formed agreements like the Australia-India Economic Cooperation and Trade Agreement. They’re also exploring opportunities in Chile and Argentina through Khanij Bidesh India Ltd (KABIL).

G20 Leadership: Under India’s G20 presidency, the country is emphasizing the importance of critical minerals for a sustainable future.

About Mines and Minerals (Development & Regulation) Act, 2023

Recent Amendment: This is the latest in a series of amendments since 2015 to promote mining in India.

Special Provision: The Act includes provisions for Exploration Licenses (EL) specifically for deep-seated and critical minerals.

Atomic Minerals: Six minerals, including lithium, were removed from the atomic minerals list.

Government Role: The central government is tasked with auctioning 24 critical minerals, but revenues go to the respective state governments.

Objective: Strengthen India’s domestic mining, reduce import reliance, and ensure a sustainable supply of critical minerals.

Impact: The changes are expected to boost domestic exploration and production of essential minerals for clean energy technologies.