A strategy for securing critical minerals

Advanced materials, critical minerals and metals are revolutionising nations’ progress as they are widely employed in both industrial and strategic sectors. From renewable energy to electronics and healthcare, these materials are essential for innovation and play a crucial role in addressing key socio-economic challenges, such as climate change and improved resource efficiency.

Rising Global Demand Driven by Technological Development

The global demand for such materials is steadily increasing due to the rapid pace of technological development. For example, materials like rare earth elements, lithium, cobalt, indium, and many others are being extensively used in high-tech devices, electric vehicles, renewable energy systems, and advanced healthcare technologies.

Global Supply Chain Dominance and Geopolitical Risks

However, only a few countries are leading the production and supply of critical minerals and metals, thereby controlling a significant portion of the global market. This dependency raises concerns about supply chain vulnerabilities and geopolitical risks. As a result, countries worldwide are now actively seeking to diversify their sources and reduce dependencies.

India’s Growing Demand for Critical Minerals and Metals

India is one of the world’s largest consumers of critical minerals, materials and metals, with a rapidly growing demand driven by its expanding manufacturing and technology ecosystem.

Key Areas for Collaboration and Development Identified by CII

Through industry consultations, CII has identified 10 critical areas in advanced materials, critical materials, and metals for focused collaboration to fast track their commercial development and utilisation.

Challenges in Large-Scale Production and Raw Material Availability

These include biomaterials, ceramics, composites, graphene, rare earths, recycling materials, titanium, semiconductor materials, aluminium, and steel. While these materials are extensively worked upon and often are exploited commercially, largescale production to meet the increasing future demand is lagging.

Raw Material Scarcity and Import Dependency

Among the most important challenges in this regard relate to the unavailability of raw materials. For example, India has limited resources of rare earth elements. For metals also, high quality metallurgical coke concentrates are mostly imported.

Shortage of Skilled Manpower and Other Challenges

Another challenge is the shortage of skilled manpower in the materials, minerals and metals sectors. This is primarily because of gaps in specialised training, advanced skills, and collaborations. Regulations, standards, and environmental concerns are other challenges to be addressed.

Government Initiatives to Strengthen Domestic Supply Chains

India has recognised the need to develop a robust domestic supply chain for critical minerals and metals. The government has initiated pioneering measures to promote exploration, mining, and processing of these resources within the country.

Budget 2024-25 announced the Critical Minerals Mission to boost the domestic production and recycling of critical minerals like copper and lithium. This is a significant step towards securing the supply chains of essential minerals vital for modern technologies.

Looking ahead

Going forward, there’s a need for several actions:

First, regular updates to regulatory guidelines by incorporating insights from research and academic experts, will be essential. This iterative process ensures that new materials or techniques are appropriately regulated, thereby potentially reducing entry barriers for indigenous technologies.

Two, it is important that artificial intelligence, machine learning, and various advanced manufacturing technologies be adopted to solve problems related to materials and manufacturing.

Three, enhanced skilling through integrating practical training into technical education programmes, establishing skill development centres specific to advanced materials manufacturing and encouraging summer training for technology students in core engineering industries would be useful.

Four, industry academia collaboration projects, setting up state of the art testing and validation centres, understanding of regulatory compliances, and knowledge of international standards should be incorporated in the course curriculum.

Five, facilitation of technology transfer from academic and national laboratories to startups or MSMEs is vital. Implementing policies to curb duplicate efforts in academia and industrial R&D further optimises resource utilisation and fosters innovation.

Finally, India has been actively engaging in collaborations with other countries to secure a diversified and sustainable supply of these materials. We need to continue focus on enhancing collaborations with other countries to ensure a stable supply of critical minerals and metals. Bilateral and multilateral agreements and strategic alliances can help in developing sustainable supply chains.

Adopting sustainable mining would also ensure responsible extraction of critical minerals and metals. This includes promoting environmental protection, social responsibility, and ethical sourcing practices.

This article was written by Mr Chandrajit Banerjee, Director General, Confederation on Indian Industry. It was first published on 11th August 2024 in The Hindu BusinessLine