Hindu Editorial Analysis : 23-January-2025
Recent developments in China’s control over the export of critical minerals have raised concerns globally. Nations like India are reconsidering their strategies for securing these essential resources. Critical minerals are vital for the production of modern technologies and hold great significance for national security and economic growth.
What Are Critical Minerals?
Critical minerals are essential for the manufacturing of advanced technologies such as electric vehicles (EVs), renewable energy systems, and defense equipment. These minerals are labeled as critical because of their limited availability, the complexity of their extraction, and the potential disruption of their supply chains. Shortages of these minerals can have a higher impact on the economy compared to other raw materials.
China’s Dominance in Critical Minerals
China has a commanding position in the global production and processing of rare earth elements (REEs) and other strategic minerals. According to the International Energy Agency (IEA):
- China processes over 85% of the world’s rare earths.
- It controls 70% of global lithium refining.
- It holds a significant stake in cobalt mining through investments in Africa.
Reasons Behind China’s Dominance
- Geopolitical Strategy: China has formed long-term supply agreements with mineral-rich nations, especially in Africa and South America.
- Technological Supremacy: With advanced processing technologies, China maintains a competitive edge.
- Vertical Integration: China controls every stage of the critical mineral supply chain, ensuring a consistent flow of processed materials.
Implications for India
India heavily relies on imports for its critical mineral needs. This dependence poses risks to sectors such as renewable energy, electric vehicles, and defense. Specifically, India is highly dependent on China for:
- Bismuth (85.6%)
- Lithium (82%)
- Silicon (76%)
- Titanium (50.6%)
- Tellurium (48.8%)
- Graphite (42.4%)
India’s limited domestic reserves further exacerbate this problem, making it essential to source minerals internationally. Delays in supply chains could impact India’s energy transition goals and defense manufacturing capabilities. Moreover, over-dependence on China affects India’s strategic autonomy.
Recasting India’s Strategy
To reduce dependency on China, India needs to implement a multi-pronged approach:
- Strengthening Bilateral Ties: India should focus on building partnerships with countries rich in minerals, such as Australia, Chile, and Namibia. Recent agreements with Australia for lithium and cobalt are a good start.
- Investing in Domestic Capabilities: India must prioritize domestic exploration and mining. Investing in geological surveys and promoting private sector participation could boost mineral production.
- Diversifying Supply Chains: India should form alliances with countries across Africa, Latin America, and Southeast Asia to reduce over-reliance on China. Leveraging multilateral platforms like the Quad and IPEF can also help secure mineral access.
- Focusing on Recycling: Recycling critical minerals from electronic waste and used batteries offers a sustainable alternative to traditional mining and can reduce import dependency.
- Building Strategic Reserves: India should establish reserves of critical minerals to safeguard against future supply disruptions.
- Leveraging Technology: Advanced technologies, such as deep-sea mining and synthetic mineral substitutes, can help reduce reliance on traditional mineral sources.
Policy Reforms in India
The Indian government has implemented several policies to address the critical mineral challenge:
- Mines and Minerals (Development and Regulation) Amendment Act, 2023: This law empowers the central government to auction critical mineral blocks, ensuring transparency and efficiency.
- National Critical Mineral Mission (NCMM): The NCMM aims to enhance the exploration, production, and processing of critical minerals within India, supporting self-reliance and the green economy.
- Khanij Bidesh India Ltd. (KABIL): This initiative focuses on acquiring overseas mineral assets, particularly lithium, cobalt, and nickel, through partnerships with countries like Argentina and Australia.
- Mining Tenement System (MTS): This digital platform is designed to streamline mineral resource management, improving efficiency and transparency.
Why In News
The recent strategic maneuvers by China in controlling the export of critical minerals have sent ripples across the global economic landscape, prompting nations like India to rethink their approach to securing these vital resources and consider long-term strategies to reduce dependence on a single dominant supplier.
MCQs about China’s Strategic Control of Critical Minerals and Its Impact on India
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What are critical minerals essential for?
A. Only defense technologies
B. Only energy production
C. The production of modern technologies, including defense and renewable energy
D. Manufacturing basic construction materials
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Which country controls over 85% of the world’s rare earth elements (REEs)?
A. India
B. United States
C. China
D. Russia
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What is one key reason behind China’s dominance in critical minerals?
A. Lack of technological advancement
B. Geopolitical strategy and long-term supply agreements
C. Limited domestic production capabilities
D. Inability to integrate supply chains
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Which policy initiative aims to improve India’s self-reliance in critical minerals?
A. Mines and Minerals (Development and Regulation) Amendment Act, 2023
B. National Green Energy Mission
C. Global Mineral Expansion Plan
D. Strategic Mineral Independence Act
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