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What are Critical Minerals?
Critical minerals are natural resources indispensable for high-tech applications but with limited global availability.
Examples: Lithium, Cobalt, Rare Earth Elements (REEs), Nickel, and Graphite.
Importance in Modern Industries:
Renewable Energy: Used in solar panels, wind turbines, and battery storage systems.
Electronics: Essential for smartphones, semiconductors, and advanced computing.
Defense: Critical for radar systems, missile guidance, and aerospace technology.
Key Factors Behind China’s Leadership:
Resource Reserves:
China holds significant deposits of rare earth minerals, controlling over 60% of global production.
Processing Capacity:
Dominates the refining and processing industry, making it a global hub for raw material conversion.
Strategic Investments:
Active in acquiring mining rights in Africa, South America, and Australia to secure long-term supplies.
Government Policies:
Heavy subsidies and state-led initiatives like the “Made in China 2025” plan support resource monopolization.
Geopolitical Implications:
Supply Chain Control: China’s dominance gives it leverage in critical supply chains, impacting global industries.
Economic Weaponization: Export restrictions, like those imposed on rare earths in 2010, highlight China’s capacity to influence global markets.
Current Scenario:
India imports the majority of its critical mineral requirements, with China being a significant supplier.
The country has limited domestic reserves of essential materials like lithium and cobalt.
Key Challenges:
Lack of Exploration and Mining:
Insufficient mapping of mineral resources and outdated mining practices hinder self-reliance.
Processing and Refining Deficit:
India lacks the industrial capacity to refine critical minerals, relying on imports for high-purity materials.
Policy and Regulatory Gaps:
Inconsistent policies and bureaucratic delays deter private sector investment in exploration.
China’s Key Strategies:
Global Mining Investments:
Acquisitions in lithium-rich countries like Chile and Australia.
Technological Edge:
Heavy investment in research and development (R&D) for processing technologies.
Bilateral Agreements:
Exclusive trade agreements with mineral-rich nations to secure supply chains.
Lessons for India:
Diversifying Supply Chains:
Reduce dependency on China by fostering ties with other mineral-exporting nations.
Scaling Up Domestic Capacity:
Enhance exploration, mining, and refining capabilities through public-private partnerships.
International Alliances:
Collaborate with groups like the Quad or International Energy Agency (IEA) to build strategic reserves.
Existing Policies:
National Mineral Policy (NMP) 2019:
Aims to promote sustainable mining and attract private investment.
KABIL (Khanij Bidesh India Limited):
A joint venture to identify and acquire overseas mining assets.
PLI Scheme for Advanced Chemistry Cell (ACC) Batteries:
Incentivizes domestic manufacturing of battery storage systems.
Recent Developments:
India signed agreements with countries like Australia and Argentina for mineral exploration.
The Geological Survey of India (GSI) identified lithium reserves in Jammu and Kashmir.
India’s critical minerals strategy must evolve in response to China’s dominant position and the growing global demand for these resources. Building self-reliance while fostering international cooperation is essential for securing its energy, technological, and economic future. By adopting a holistic approach encompassing exploration, innovation, and diplomacy, India can transform its critical minerals sector into a cornerstone of national growth and resilience.
For UPSC aspirants, understanding this topic equips them with insights into resource geopolitics, sustainable development, and India’s strategic imperatives in a rapidly changing world.
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