India will spend $4 billion to find critical minerals, a space dominated by China

The Union Cabinet of the government of India plans to spend ₹34,000 crore ($3.92 billion at current exchange rates) on the National Critical Minerals Mission.

The Budget for financial year ending March 2025 had proposed the establishment the mission to ensure domestic production, recycling and acquisition of foreign mines of critical minerals, which are used in technologies such as solar modules, wind turbines, transmission networks and batteries..

The central government has set aside ₹16,300 crore from the exchequer. State governments will get money from the budget for critical minerals. State-owned enterprises will invest another ₹18,000 crore from their own resources. India has so far auctioned critical mineral mines in four tranches.

Some of the private sector companies with interests in critical minerals include Ola Electric, Hindalco, and GMDC, which were reportedly eyeing graphite mines in Sri Lanka. Meanwhile, Vedanta, SAIL, Tata Steel, and Adani Group were exploring similar opportunities in Australia, according to an Indian Express report in March 2024.

Earlier this month, Coal India signed a pact with IREL (India) Limited, a public sector undertaking under the Department of Atomic Energy, to develop critical mineral blocks.

Over the last couple of years, the Narendra Modi administration has taken a series of steps to secure long-term supply of critical minerals. First, in November 2023, it classified at least 30 minerals as ‘critical’ and in the following 12 months, at least four rounds of auctions had concluded.

What are critical minerals?

The government’s list included antimony, beryllium, bismuth, cobalt, copper, gallium, germanium, graphite, hafnium, indium, lithium, molybdenum, niobium, nickel, PGE, phosphorus, potash, rare earth elements (REE), rhenium, silicon, strontium, tantalum, tellurium, tin, titanium, tungsten, vanadium, zirconium, selenium, and cadmium.

The mission’s mandate will include technology development, workforce training, an extended producer responsibility framework, and a suitable financing mechanism.

China controls 72% of the world’s solar modules, 69% of lithium-ion batteries and 45% of wind turbines and produces 63% of the world’s rare earth elements, including 45 per cent of molybdenum.