India’s reliance on China for critical minerals

(Source – The Hindu, International Edition – Page No. – 10)

Identification of Critical Minerals

• In 2023, the Ministry of Mines identified 30 critical minerals crucial for India’s economic development and national security.
• While India’s import dependency on 10 minerals was highlighted, the article points out the significant issue of dependency on China.

China’s Dominance in the Global Mineral Market

• China’s Vast Resource Base and Mining Capabilities
  • China is the world’s largest mining nation, having discovered 173 types of minerals, including key minerals like copper, nickel, lithium, cobalt, and rare earth elements.
  • China controls nearly 40% of global reserves for critical minerals and has invested significantly in exploration, discovering 132 new mineral deposits, including 34 large ones.
• Processing and Refining Dominance
  • China dominates mineral processing and refining, controlling 87% of rare earth processing, 58% of lithium refining, and 68% of silicon processing, giving it a significant influence over global supply chains.

China’s Export Controls Strategy

• Strategic Export Restrictions
  • China strategically controls exports of critical minerals like antimony, gallium, and germanium, especially those vital for semiconductor, battery, and high-tech manufacturing.
  • However, China carefully balances these restrictions to avoid harming its own domestic industries that rely on these minerals and ensures it doesn’t disrupt its key economic sectors.

India’s Dependency on Chinese Imports

• High Dependency on Chinese Supplies
  • India’s vulnerability to Chinese supplies is particularly high for six critical minerals: bismuth (85.6%), lithium (82%), silicon (76%), titanium (50.6%), tellurium (48.8%), and graphite (42.4%).
  • Bismuth, lithium, and graphite are critical for various industries, including pharmaceuticals, EV batteries, and solar panels, all of which rely heavily on Chinese processing and production.

Challenges Behind India’s Import Reliance

• Structural Issues in Mining and Processing
  • Despite possessing significant mineral resources, India faces challenges in mining technologies and processing capabilities, limiting domestic production.
  • Lack of private sector participation and inadequate policy incentives hinder the development of India’s mining sector.

India’s Strategy to Reduce Dependency

• Multi-Pronged Approach
  • India has launched initiatives like KABIL, a joint venture of three State-owned companies, to secure overseas mineral assets and diversify supply sources.
  • India is engaging in global partnerships, such as the Minerals Security Partnership and the Critical Raw Materials Club, to reduce its dependence on China.
• Focus on Research and Recycling
  • India is investing in research through institutions like the Geological Survey of India and the Council for Scientific and Industrial Research.
  • The country is also promoting recycling and circular economy practices, including production-linked incentives for extracting critical minerals through recycling.
• Long-Term Commitment Needed
  • While these efforts are promising, a sustained investment and long-term commitment are necessary for India to successfully reduce its dependency on China.

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