• UGI USER
  • Sep 06, 2024
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CRITICAL MINERAL MISSION IN INDIA

SYLLABUS:

GS 2:

  • Economic Development
  • Mineral Exploration

Focus:

India’s Critical Mineral Mission announced in the Union Budget 2024 – 25 . This Mission has put Africa at the centre of India’s mineral sourcing policy. Holding 30% of global reserves, Africa has a great potential for cooperation with India in terms of its transition to green energy resources and demand in critical minerals.

Source:medium

Background and Context:

  • Union Budget 2024-25: The Union Finance Minister of India, announced the creation of Critical Mineral Mission for sourcing mineral resources beneficial to the nation’s economy.
  • Mission Objectives: Emphasise the development of the new capacities, the recycling of critical minerals and incentivising the acquisition of overseas assets.
  • Legal Framework: The Mines and Minerals (Development and Regulation) Act of 1957 was amended in 2023 to remove six minerals from the atomic list and open it for exploration for private sectors.
  • International Collaboration: KABIL ( Khanij Bidesh India Limited), which was set up in 2019, will help India interact with mineral exporting countries .In particular, the country signed an MoU with Argentina for lithium exploration.
  • Domestic Gaps: India should have the ability to manufacture critical minerals, acquire highly skilled workers and technology to explore these minerals.
What are Critical Mission?

  • Critical minerals are defined as the minerals which are vital for economic growth and national security. Their scarcity or the fact that they are mainly found in some parts of the world and their extraction and processing may be conducted in specific areas, can pose some risks in the supply chain and can also affect several industries depending on these resources.

Importance of Critical Mineral Mission:

  • Boosting Domestic Production & Recycling : Helps build up India’s capability as far as refining, processing, and recycling of the critical minerals in order to be least dependent on foreign nations.
  • Identifying Critical Minerals: As an aid in the identification of emerging minerals, it assist in determining key minerals to plan for the future arrangements for their procurement and conservation.
  • Reducing Import Dependency: Its objective is to reduce India’s import dependence especially for those elements with which the country is fully import reliant.
  • Fostering Exploration & R&D: Puts emphasis on speeding up the mineral resources acquisition, enhancing resource utilization, recycling, and developing alternative materials through research and development.

Africa’s role in India’s supplu chain:

  • Africa’s Critical Reserves: Africa holds 30% of the global critical mineral resources, which are very crucial for any country’s critical minerals mission, including that of India.
  • India-Africa Ties: India has strong political , economic and trade relations with deep historical and cultural affinity to Africa with a growing diaspora of three million.
  • Trade and Investments: The bilateral trade between India and Africa has risen to $98 billion in 2022-23 with $43 billion in mining industries and large scale public sector investments on energy assets.
  • Energy Partnerships: India has stepped up its crude oil imports from Africa by a third to 34 million tonnes annually, satisfying 15% of its consumption; there is additional increase of natural gas and mineral imports.
  • African Policy Shifts: Most African countries are departing from exporting raw materials by adopting value addition strategies such as; Tanzania’s Multi-Metal Processing Facility and Zimbabwe’s Export Bans.

China’s supremacy in the sector:

  • China’s Early Moves: The nature of Chinese acquisitions particularly of critical minerals have given them near monopolistic control over the global value chain, which is an economic and security risk to India.
  • Processing Capabilities: Beijing has well established processing & manufacturing industries hence a strategic position in global value chains.
  • Cobalt Mining in Congo: Cobalt is mainly mined in the Democratic Republic of Congo where currently major Chinese mining firms have signed a $7 billion minerals-for-infrastructure agreement.
  • Indian Concerns: Chinese dominance in these minerals diametrically threatens to challenge India’s access to these minerals, implying the need to diversify the supply base.
  • Competitive Geopolitics: The increased political rivalry in Africa calls for the development of other sources in sourcing of critical minerals by India.

Opportunities for India-Africa Collaboration

  • Indian Infrastructure Projects: Some of the completed infrastructure projects by India in Africa includes; hospitals in Tanzania, Transmission lines in Tunisia and Railways in Ghana in 43 African countries.
  • Strategic Projects: India can partner with the African nations to seek out the logical mineral projects, and establish infrastructure requisite to mining.
  • Capacity Building: India has signed MoUs with Zambia and Zimbabwe for geological mapping and capacity building in the mineral sector, utilizing programs like the Indian Technical and Economic Cooperation.
  • Value Addition Focus: India’s collaboration with Africa should prioritize value addition to minerals, aligning with African goals of industrializing their mineral sectors.

Way Forward for India’s Critical Mineral Mission:

  • Responsible Practices: India’s Critical Mineral Mission must ensure responsible and sustainable mining practices to support a not-so-green energy transition.
  • Training Workforce: Upskilling both Indian and African workforces is crucial, using mechanisms like the Indian Technical and Economic Cooperation to develop expertise in critical minerals.
  • Partnership Leverage: India can leverage its long-standing relationships and expertise to support African governments in value addition, boosting both economies.
  • Strategic Alignment: Aligning with Africa’s green mineral strategy will provide India with a reliable and ethical source of critical minerals.
  • Balanced Approach: India must balance its need for critical minerals with fostering development in Africa, ensuring mutual growth and reducing dependence on China.

Conclusion:

Africa’s mineral wealth, combined with India’s technological and infrastructural capabilities, provides a unique opportunity for mutually beneficial partnerships. India must focus on sustainable mining practices, technology-driven exploration, and value addition to create resilient supply chains and reduce dependency on geopolitical rivals like China.

Source:The Hindu

Mains Practice Question

Examine the potential of India-Africa collaboration in ensuring a sustainable supply of critical minerals for India. How can India leverage its technological expertise and infrastructure projects to secure these resources while promoting value addition in Africa?