Why in the news?

  • The Union cabinet has cleared the new royalty rates of Critical Minerals.

Critical Minerals

  • What is it?: Critical minerals are minerals that are essential for economic development, strategic sectors, and energy transition, but are vulnerable to supply disruptions.
  • They are defined based on: High economic Importance and High supply risk.
  • Importance:
    • Clean Energy transition:
      • Solar panels: Silicon, Silver, Gallium, Indium.
      • Wind turbines: Rare Earth Elements (REEs), Neodymium, Dysprosium.
      • EV batteries: Lithium, Cobalt, Nickel, Graphite.
    • Strategic Defence Needs:
      • Jet engines: Titanium, Niobium.
      • Precision-guided missiles.
      • Nuclear: Zirconium.
    • Semiconductor and Electronics:
      • Chips: Germanium, Gallium, Platinum Group Metals (PGMs).
      • Communications: Vanadium, Tungsten.
    • Economic and Geopolitical Importance: Mineral supply chains concentrated in few countries
      • China dominance in REEs and, Graphite
      • DRC in Cobalt.
  • India and Critical Minerals:
    • India has identified 30 Critical minerals: Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, PGE, Phosphorous, Potash, REE, Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium and Cadmium.
    • Vulnerabilities of India:
      • 85–100% import dependence for Li, Co, Nickel, REEs.
      • Refining dominated by China (70–90% capacity).
      • Domestic reserves limited and under-explored.
  • Major Initiatives of India:
    • Critical Minerals Mission (CMM):
      • National framework for exploration, processing & supply security.
      • Focus on “Mine in India + Make in India”.
    • Khanij Bidesh India Ltd (KABIL):
      • Joint venture of NALCO, HCL, MECL.
      • Secures overseas assets for Lithium and Cobalt in Argentina, Australia, Chile and Bolivia.
    • Mines and Minerals (Development & Regulation) Amendment Act, 2023:
      • Private participation allowed in mining of lithium, REEs, and other critical minerals.
      • Auction-based allocation.
    • Critical Mineral Recycling Incentive Scheme:
      • It is to promote recycling of critical minerals from secondary sources such as e-waste, lithium-ion battery (LIB) scrap, and scrap from end-of-life vehicles
      • The scheme is part of the broader National Critical Mineral Mission (NCMM).
    • India–Australia Critical Minerals Investment Partnership: Ensures supply of battery minerals (Li, Co, Ni).