Syllabus: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Context
- The Union Cabinet has launched a ₹7,280 crore rare-earth magnet scheme, emphasising that mining without processing only exports value.
- A new G20 framework on critical minerals stresses refining and manufacturing over raw extraction.
India’s Current Gaps
- India has improved mining governance through reforms in the Mines and Minerals (Development and Regulation) Act, including exploration licences, national auctions and a mineral exchange.
- However, India still lacks large-scale processing and refining capacity, making supply chains vulnerable.
- India imports nearly all of its lithium, nickel, cobalt, despite domestic mineral potential.
- High-purity materials are essential not only for clean energy but also for semiconductors, telecom, automobiles, pharma and defence.
Global Chokepoint
- The midstream segment—processing and refining—is globally concentrated.
- China controls over 90% of rare earth and graphite refining, and has tightened export controls citing national security.
- Without domestic refining, India remains exposed to geopolitical shocks and supply disruptions.
Existing Opportunities
- India already mines and processes copper, graphite, silicon, tin, titanium, rare earths and zirconium, though at inadequate scale and purity.
- A new ₹1,500 crore critical minerals recycling scheme is a constructive step.
Five Key Measures for India
- Strengthen Centres of Excellence
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- Leverage nine NCMM Centres to develop applied research and commercial-scale processing technologies.
- Enable collaboration among IITs, NITs, think tanks and industry on life-cycle assessments and cost modelling.
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- Recover Minerals from Secondary Resources
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- Tap large secondary streams:
- Coal fly ash (light and heavy rare earths)
- Red mud (gallium)
- Zinc residues (cobalt)
- Steel slag (vanadium)
- Tap large secondary streams:
- Integrate recovery units into Critical Minerals Processing Parks.
- Build a Skilled Workforce
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- Train process metallurgists and technicians in hydrometallurgy and advanced refining.
- Use ₹100 crore NCMM funding for new curricula, CSIR-led programmes and diploma-level training.
- Provide Demand Assurance and Finance
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- Use models like the U.S. DoD–MP Materials deal—government offtake guarantees and price support.
- India can use its planned mineral stockpiles as market stabilisers.
- Mandate partial domestic sourcing in defence, pharmaceuticals and electronics.
- Strengthen Mineral Diplomacy
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- Move beyond ore acquisition to co-investment alliances.
- Demonstrating high-purity refining can help India redesign global supply partnerships.
- Processing parks can become hubs for foreign co-processing investments.
Conclusion
- India’s real bottleneck is processing, not mining.
- Mastering refining technologies will determine whether India stays a raw material supplier or emerges as a leader in resilient, clean-tech industries.