THERE HAS BEEN A 75% growth in deployment of solar PV and wind power capacity globally over the past one year. As a result, prices of inputs such as copper, major battery metals and rare elements tripled in two years after January 2020. India’s dependence on imports for these critical minerals to run its ambitious renewable energy programme is forcing it to explore its own natural resources for a sustainable future.
“Domestic and global efforts are required to secure critical mineral supply chain, enhance skill development in India and focus on recycling,” Veena Kumari Dermal, joint secretary, Ministry of Mines, said at a recent summit. Though these mines are located in Africa and Indonesia, their supply chain is owned by Chinese, U.S. and European companies. According to a recent International Energy Agency (IEA) study on critical minerals, in 2023, demand for lithium rose 30%, while that of nickel, cobalt and graphite rose 8-15%. The combined market value of these minerals will more than double to $770 billion by 2040 from $325 billion now, says IEA. That is why Indian companies are looking to secure long-term supply of these new-age minerals.
National Aluminium Co, Hindustan Copper and Mineral Exploration Corp have formed a joint venture to buy mining assets overseas. Focus is on minerals such as lithium and cobalt, used to make batteries for EVs. In July 2022, Hindalco joined hands with Phinergy and IOC Phinergy for R&D and pilot production of plates for next-generation aluminium air batteries and their recycling.
Sharp growth in infrastructure has also led to a rise in demand for metals and minerals. That is why government has taken a host of initiatives to push mining. A major boost was enactment of Mines and Minerals (Development and Regulation) Amendment Act, 2021, which enabled captive mine owners (other than atomic minerals) to sell up to 50% of their annual mineral (including coal) production in the open market. It allowed 29 critical minerals to be eligible for exploration and mining concessions. Another move was to allow offshore exploration of minerals, by introducing the Offshore Areas Mineral (Development and Regulation) Amendment Bill, 2023. The ministry handed over 152 mineral block reports to state governments until November 2021. Also, 52 potential blocks were handed over to 15 states.
According to data from mines ministry, production of minerals (other than atomic, minor and hydrocarbon energy minerals) was worth ₹1.18 lakh crore in FY23 and ₹1.32 lakh crore in FY22. These include bauxite, chromite, copper ore, gold ore, iron ore, lead, zinc, silver and manganese. Iron ore and limestone together account for 80% of the total MCDR (Mineral Conservation and Development Rules) mineral production by value. India produced 277 million metric tonnes (MMT) iron ore in FY24, exceeding the 258 MMT in FY23. Limestone production hit a record 450 MMT in FY24, a 10.7% rise YoY. Production of primary aluminium, meanwhile, rose 2.1% to 41.59 lakh tonnes in FY24. The growth in infrastructure-focused mineral production is reflected in performance of end-user industries. India has set a target of total crude steel capacity of 300 million tonnes per annum (MTPA) and crude steel demand/production of 255 MTPA by FY31.
The ambition should augur well for its future mineral security.