Critical Minerals

Critical minerals are minerals that a country needs badly for its economy and security, but whose supply is at risk. They are used in things like mobile phones, electric vehicle batteries, solar panels, wind turbines, computer chips and defence equipment. Lithium, cobalt, nickel, graphite and the rare earth elements are common examples. A mineral becomes "critical" when it is both very important and hard to get reliably.

Why do they matter?

The world is moving from petrol and coal towards clean energy. An electric car needs a battery, and a battery needs lithium, cobalt, nickel and graphite. A wind turbine needs strong magnets made from rare earth elements. So these minerals are to the clean-energy age what oil was to the 20th century. If a country cannot get them, its factories stop, its clean-energy plans slow down and it may even struggle to make defence equipment.

What makes a mineral "critical"?

Two things are checked:

1. Economic importance: How much the country's industries and security depend on it.
2. Supply risk: How likely it is that supply gets cut, for example because only one or two countries produce it, or because the country has little of it at home.

A mineral that scores high on both is critical. So the list is different for each country and can change over time.

India's list

In June 2023, the Ministry of Mines released India's first list of 30 critical minerals, based on the report of an expert committee. The list is: antimony, beryllium, bismuth, cadmium, cobalt, copper, gallium, germanium, graphite, hafnium, indium, lithium, molybdenum, niobium, nickel, platinum group elements (PGE), phosphorus, potash, rare earth elements (REE), rhenium, selenium, silicon, strontium, tantalum, tellurium, tin, titanium, tungsten, vanadium and zirconium. India depends heavily on imports for many of them, including lithium, cobalt and nickel.

The global problem: concentration

A small number of countries control supply. According to the International Energy Agency (IEA), China does about 60% of the world's rare earth mining and about 90% of rare earth refining, and it also dominates the refining of lithium, cobalt and graphite. Mining can be concentrated too: as of 2025, the Democratic Republic of Congo (DRC) mines more than 70% of the world's cobalt.

Mining is only the first step. The ore must be processed and refined into pure, factory-ready material, and this "middle step" is where China is strongest. When one country controls a step, it can cut supply or raise prices, as seen when China placed export controls on minerals like gallium, germanium and some rare earths.

For example, on 4 April 2025, China began requiring special export licences for seven rare earth elements: samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium. Exports of these elements dropped sharply while companies waited for licences. Indian car makers that depend on Chinese rare earth magnets faced supply problems as a result.

India's domestic steps

• MMDR Amendment Act, 2023: Amended the Mines and Minerals (Development and Regulation) Act, 1957. It listed 24 critical and strategic minerals in Part D of the First Schedule, and gave the Central Government the power to auction mining leases and composite licences for them. It also removed some minerals, like lithium, from the restricted atomic minerals list, and created a new exploration licence for deep-seated and critical minerals.
• National Critical Mineral Mission (NCMM): Approved by the Union Cabinet on 29 January 2025, with an outlay of ₹16,300 crore, plus about ₹18,000 crore expected from public sector companies. It runs for seven years, from 2024-25 to 2030-31. It covers exploration, mining, processing, recycling and buying mineral assets abroad. It also supports recovering minerals from waste, such as mine tailings and fly ash. The Mission also plans a National Critical Mineral Stockpile: a reserve of key minerals that India can draw on if supply is suddenly cut. By 2030-31, the Geological Survey of India (GSI) is to take up 1,200 exploration projects, and more than 100 critical mineral blocks are to be auctioned.
• Scheme for Rare Earth Permanent Magnets (REPM): Approved by the Union Cabinet on 26 November 2025, with an outlay of ₹7,280 crore. The Ministry of Heavy Industries runs it. Rare earth permanent magnets are the strongest kind of permanent magnet. They are used in EV motors, wind turbines, electronics and defence equipment. The scheme aims to build 6,000 tonnes a year of magnet-making capacity in India. It covers every step: rare earth oxides to metals, metals to alloys, and alloys to finished magnets. The money is split into ₹6,450 crore of sales-linked incentives over five years and ₹750 crore of capital subsidy. Up to five companies, chosen through global bidding, will share the capacity.
• KABIL (Khanij Bidesh India Ltd): A joint venture of three public sector companies (NALCO, HCL and MECL) set up on 8 August 2019 under the Ministry of Mines. The three companies own it in the ratio 40:30:30. Its job is to find and buy critical mineral assets abroad. It has, for example, signed lithium exploration deals in Argentina. In January 2024, it signed an agreement with CAMYEN, a state-owned company of Catamarca province, Argentina, to explore and develop five lithium brine blocks. Lithium brine is salty water under the ground that has lithium dissolved in it. This is the first lithium exploration and mining project by an Indian government company abroad.

India's international partnerships

• Australia: Australia is one of the world's largest producers of lithium and has large reserves of many other critical minerals. In March 2022, KABIL and Australia's Critical Minerals Office signed an agreement to jointly fund the search for projects. Australia committed A$ 5.8 million over three years. In 2023, the two countries identified five target projects: two lithium and three cobalt for detailed study.
• Canada: Canada is one of the world's largest producers of potash (a fertiliser mineral) and a major producer of uranium, nickel and cobalt. On 2 March 2026, India and Canada signed a Memorandum of Understanding (MoU) on critical minerals. An MoU is a written promise to work together, but it is not a binding treaty. It covers trade and investment, and sharing know-how in exploration, mining and processing.
• Minerals Security Partnership (MSP): A US-led group started in 2022 to build secure, diverse supply chains. India joined in June 2023.
• Quad and other groupings: The Quad (India, the US, Japan and Australia) has also discussed critical mineral supply chains.

Commonly confused concepts

• Critical minerals vs rare earth elements: Rare earth elements are a group of 17 elements (the 15 lanthanides plus scandium and yttrium). They are only one item on India's list of 30 critical minerals. Not every critical mineral is a rare earth.
• Critical vs strategic minerals: "Critical" is about economic need plus supply risk. "Strategic" usually points to defence and national security use. Many minerals are both, and the MMDR Act's Part D covers "critical and strategic minerals" together.
• Atomic minerals vs critical minerals: Atomic minerals (like uranium and thorium) are handled by the Department of Atomic Energy. The 2023 amendment moved some minerals, like lithium, out of the atomic list so that private companies can also mine them.
• Mining vs processing: Having a mineral in the ground is not enough. The ore must be refined. Much of the world's supply risk lies in processing, not in mining.

Issues, criticism and the way forward

• Import dependence: India depends on imports for most of its lithium, cobalt and nickel, which exposes it to price swings and supply cuts.
• Weak processing base: Even when India buys ore, it lacks enough refining capacity. Building it needs large investment and advanced technology.
• Slow exploration and auctions: Several critical mineral blocks put up for auction have got little interest, because the quality of data about the deposits is often poor.
• Environment and people: Mining can harm forests, water and tribal communities. Laws like the Forest Rights Act, 2006 and the need for consent of local gram sabhas must be respected.
• Way forward: Better exploration data, recycling of used batteries (the "urban mine"), research on new battery chemistries (like sodium-ion), and long-term partnerships with mineral-rich, trusted countries like Australia.

Concepts to Know

• Supply chain: All the steps needed to make a product and get it to the buyer: mining, processing, making parts, assembling and selling.
• Refining / processing: Turning raw ore dug out of the ground into a pure material that factories can use.
• Rare earth elements (REE): A group of 17 metals used in strong magnets, electronics and defence equipment. They are not actually rare in the earth, but are hard and polluting to separate.
• Export controls: Rules by which a country limits or stops the sale of certain goods to other countries.
• Composite licence: A single licence that lets a company first explore an area and then mine it.
• Mine tailings: The waste left over after the useful mineral is taken out of the ore. It may still contain small amounts of valuable minerals.
• Sales-linked incentive: Money the government pays a company based on how much it actually sells. The more it makes and sells, the more support it gets.
• Capital subsidy: Money the government gives to help pay for building a factory and buying its machines.
• Stockpile: A store of a material kept aside in advance, so that a country can keep its factories running if imports stop for a while.