Energy, Sustainability & Mobility

Critical Energy Transition Minerals For India

Introduction

The International Panel on Climate Change reports that greenhouse gas emissions from human activities are responsible for approximately 1.1 degree celsius of warming since 1850 -1900, and finds that averaged over the next 20 years, the global temperature is expected to reach or exceed 1.5 degree celsius of warming.¹ Given these stark realities, transitioning towards net zero emissions is crucial for mitigating the global greenhouse gas emissions.

With regard to recent policy discourses on critical minerals, there is an increasing tendency for them to be considered the “new frontier of geopolitics” because of their role as key inputs in the development of clean energy technologies, advanced manufacturing, semiconductors, and strategic industries. It has been noted that reliable supplies of critical minerals have become integral to India’s strategic autonomy and technological security.²

The global shift towards low carbon pathways relies heavily on a group of raw materials known as Critical Energy Transition Minerals (“CETM”). These minerals are an essential input in a wide array of industrial and technological applications, including manufacturing of key clean energy technologies such as electric vehicles (“EVs”), solar panels, wind turbines and large-scale systems. These minerals have unique properties like high electrical conductivity, strong magnetic capabilities, and thermal stability which has resulted in an increase in their global demand.³ As per International Energy Agency’s World Energy Outlook, between 2017 and 2022, the demand for lithium surged by 300% while nickel and cobalt saw increases by 40% and 70% respectively.⁴

India requires a stable supply of CETMs to be able to meet its ambitious climate goals and achieve net-zero emissions by 2070.⁵ India’s limited domestic supply of CETM required for clean energy technologies may slow down its transition. Securing reliable access to CETMs is essential for advancing decarbonisation, strengthening India’s economic position and supporting its goal of emerging as a major participant in the global clean energy sector.

Elements of Mineral Value Chain

A mineral value chain comprises of three stages – (i) upstream, involving exploring and extracting minerals (ii) midstream, involving the processing, refining and transportation of minerals and (iii) downstream, involving production of finished goods and their distribution to consumers.

(a) Upstream

(i) Exploration and mine development: This phase involves conducting geological investigations, mapping, and prospecting to locate possible mineral deposits. Methods like remote sensing, geophysical surveys, and exploratory drilling help evaluate an area’s geological features and estimate the size and quality of any discovered prospects or resources.

Scoping, pre-feasibility, and feasibility studies are carried out to define the project’s scope and to evaluate whether mining the identified resource would be economically worthwhile. At this stage, the appropriate mining method and processing technologies are also selected.

(ii) Extraction: The extraction stage involves the actual removal of minerals from the earth, which can be accomplished through surface mining, underground mining or placer mining techniques.

(iii) Beneficiation: Beneficiation means the various processes used to separate the mineral from waste material or impurities (gangue) to improve the economic value of the ore and prepare the ores for further refinement.

(b) Midstream

Midstream is a critical stage in the value chain of CETMS as each end-use industry will require products with specific purity levels.

(i) Processing: The mined ore concentrate is then processed to separate and recover the valuable minerals and make it suitable for refining. Depending on the type of mineral, this step may use different pyrometallurgical or hydrometallurgical methods. The materials produced at this stage are partially processed mineral forms such as sulphides or oxides that have not yet been converted into their final market-ready state. These semi-processed outputs are subsequently refined to reach the high purity standards necessary for downstream component manufacturing.

(ii) Refining: After concentration and processing of minerals, refining is essential for production of high purity materials for various industries and employs hydrometallurgical and electrometallurgical processes.

(iii) Capturing co-existing minerals: CETMs are often found together within a single ore body, making refining essential for isolating and extracting each material. This process not only improves recovery efficiency but also increases the total economic return from mining activities.

(c) Downstream

Processed minerals function as essential inputs for multiple manufacturing sectors. Industries such as solar photovoltaic manufacturing, electrical equipment, renewable energy systems, wind turbines, battery and electrolyser production, and EV motor manufacturing rely on consistent and long-term access to CETMs.

Framework on critical minerals

(a) Methodology to establish criticality

The list of CETM is determined by a framework based on their criticality.⁶ To determine the criticality, a methodology is used to evaluate and prioritise the importance and risks associated with various minerals and an assessment of economic importance and the supply risk of different minerals is undertaken. Two key factors in identifying criticality are:

(i) Economic importance dimension: It measures a mineral’s importance for a country’s manufacturing sector and its consequences on the sector if the mineral is not available in the country’s supply chain. Economic importance of a mineral depends on its industrial use, economic impact in case of shortage and its role in emerging technologies like EVs.

(ii) Supply risk dimension: It measures the vulnerabilities a country may experience from global mineral supply chains due to geographic concentration of mineral extraction, or otherwise processing in a few countries weighed by the quality of governance.

Other factors for establishing a criticality framework are:

(i) Technological advancement: Technologies like solar panels, EVs and batteries rely heavily on critical minerals and a framework will foster smooth transition to a sustainable and technologically advanced economy by supporting higher quality and efficiency of the products.

(ii) Environmental, Social, and Governance (“ESG”): A framework incorporating environmental and social governance criteria will ensure that the extraction and processing of critical minerals is undertaken sustainably. ESG criteria have gained prominence internationally owing to issues related to water consumption, environmental damage, indigenous peoples, tailings disposal, and labour conditions linked to critical minerals production and processing.⁷

(iii) Innovation: It fosters innovation in improving extraction and recycling processes, enhancing the overall efficiency and sustainability of resource use.

(iv) International co-operation: Criticality frameworks can foster international collaboration with countries aligning on the criticality of certain minerals.

(v) Support to consumer uptake: By pre-empting, supply chain bottlenecks can be avoided, and therefore the prices of essential clean energy technologies can be made affordable, supporting consumer uptake.

(b) The CETM List in India

The Central Government constituted a seven-member committee under the Chairmanship of the Joint Secretary, Ministry of Mines, to identify CETMs essential for India’s energy transition. The committee adopted the following definition for critical minerals: “Critical minerals are those minerals which are essential for economic development and national security. The lack of availability of these minerals, or even the concentration of their existence, extraction, or processing in a few geographical locations, may lead to supply chain vulnerability and disruption.”⁸

To determine the minerals most vital for India, the committee undertook a multi-stage assessment. The first stage involved a comparative study of global critical mineral lists. The second stage consisted of inter-ministerial consultations to incorporate sector-specific requirements. The third stage applied an empirical formula to evaluate mineral criticality. Based on the above multi-stage analysis, the committee prioritised minerals identified as critical by various ministries. It further recommended adopting the methodology used by the European Union for assessing mineral criticality.⁹

Based on the assessment above, the Ministry of Mines, in 2023, announced India’s first list of CETM. The Ministry curated a list of 30 critical minerals for India. 24 of these identified minerals were included in Part D of Schedule I of Mines and Minerals Development and Regulation Act, 1957 (“MMDR Act”). These CETMs included Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, PGE, Phosphorous, Potash, REE, Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium and Cadmium.¹⁰

The CETMs identified and included in the list are essential to the growth of India’s cleaner economy goal. Some of the features and uses of these minerals are:

(i) The CETMs identified by the Ministry play a foundational role across India’s clean-energy sectors, which includes minerals such as silicon, tellurium, indium, and gallium are essential for manufacturing photovoltaic (PV) cells, which support India’s growing solar capacity of 64 GW.

(ii) The wind energy sector depends heavily on rare earth elements like dysprosium and neodymium for permanent magnets used in turbines which are particularly significant as India aims to expand wind capacity from 42 GW to 140 GW by 2030.

(iii) The EV ecosystem relies on lithium, nickel, and cobalt for lithium-ion batteries, with demand rising under the National Electric Mobility Mission Plan (NEMMP) targeting 6 to 7 million EVs by 2024.

(iv) Additionally, advanced energy-storage systems further require lithium, cobalt, and nickel, making secure access to these minerals indispensable for India’s broader transition toward clean and sustainable energy technologies.¹¹

Further, the Centre of Excellence on Critical Minerals (CECM) is tasked to regularly update the identified CETM list and guide strategy for the same.

REGULATORY LANDSCAPE AND POLICY INITIATIVES

India’s geological and tectonic diversity offers significant mineral potential across different regions. The country holds abundant resources including coal, iron ore, bauxite, and various precious metals. With mining activities tracing back to ancient times, India remains a notable producer of minerals such as iron ore, copper, zinc, lead, gold, silver, diamonds, and valuable gemstones. This longstanding mining tradition, supported by industrial expansion after independence, has played a key role in driving the nation’s economic growth. In this light, India has been making several moves through its policies and global alliances.

(a) Policy developments in upstream

India’s mining landscape encompasses a diverse array of 88 non-fuel minerals, yielding a production value exceeding USD 13 billion during 2022-23. The sector is expected to contribute approximately 2.85% to the nation’s gross value added and through its downstream economic linkages provides both direct and indirect employment and value creation.

Mining falls in central list and state list of the Indian Constitution, enabling both the Union (central) and State governments authority to regulate the sector. The Union (central) government is responsible for formulating legislation and policies governing mining, and the state governments is tasked with execution of these policies and overseeing industry regulation.

(i) The Mines and Minerals (Development and Regulation) Act, 1957 (“MMDR Act”): The MMDR Act enacted by the Union government is the principal legislation governing the mining sector in India. It focuses on exploration, mining auction and allocation, mineral developments and regulations, transfer of lease, tax, royalties and other concessions. Key features include:

Mineral concessions: The MMDR act provides for procedures for grant of mining leases, composite and exploration licenses, reconnaissance permits, prospecting licenses, including auction based allocations to ensure transparency and competitiveness.
Sustainable Mining: The MMDR Act promotes sustainable and responsible mining practices to ensure environmental protection, including mine closure plans.
Revenue and royalties: The MMDR Act defines structure for collection of royalties, dead rent and other fees from mining operations to generate revenue for state and central governments.
District Mineral Foundation: The MMDR Act establishes district mineral foundations to work for the benefits of persons affected by mining operations. These district mineral foundations are funded by mining leaseholders.
National Mineral Exploration: The MMDR Act creates the national mineral exploration trust (“NMET”) to foster exploration activities with a focus on enhancing mineral resources through scientific and technological advancements.
Auction mechanism: The MMDR Act introduces an auction mechanism for the allocation of mining leases and composite licences.

(ii) India’s National Mineral Policy 2019 (“NMP”): The NMP aims to facilitate the sustainable and scientific development of country’s mineral resources. The key features include:

Sustainable mining: The NMP emphasises on scientific mining practices and promotes adoption of modern technology for sustainable extraction of minerals.
Transparency and accountability: NMP provides for ensuring transparency in allocation of mineral concessions and operations.
Value addition : NMP aims to encourage the processing and value addition of minerals to increase economic benefits.
Exploring and auctioning: NMP aims to strengthen the exploration of mineral resources using advanced technology and allocation of mining leases to promote fair competition.
Research and development: The NMP promotes research and development in mineral exploration and mining technologies.
Environmental and Social Responsibility: The NMP mandates that mining companies undertake measures for environmental protection and social development, including rehabilitation and resettlement of affected communities.
Human Resources: The NMP provides for developing skilled human resources for the mining sector through training and education, improving productivity, ensuring safety and welfare of workforce.

(iii) Offshore Areas Mineral (Development and Regulation) Act, 2002 (“OAMDR”): The OAMDR deals with the exploration and mining of minerals in offshore areas such as seabed and subsoil of territorial waters. Key features include:

Exploration: The OAMDR provides a framework for granting mineral concessions, ensuring environmental protection, and promoting sustainable development of mineral resources in offshore areas.
Scientific advancement: The OAMDR facilitates systematic and scientific exploration of offshore mineral resources, attract investments, and ensure that activities are conducted in a manner that minimises environmental impact.
Exploration Licence: An Exploration License (EL) is a permit granted to explore and assess the mineral potential of a designated area.

(iv) Mines and Minerals (Development and Regulation) Amendment Act, 2023 (“MMDRA Act”): The MMDRA Act has brought about major changes in India’s critical minerals industry, by promoting private participation, simplifying mineral allocation, and ensuring the availability of minerals required for clean energy technologies and strategic sectors. These include:

Exclusive right for auctioning: Exclusive rights have been granted to the Central Government for conducting auctions regarding mineral leases and composite licenses of strategic critical minerals enlisted in Part D of Schedule I of the MMDR Act through the MMDRA Act.
Policy on critical minerals: The amendments were made to include 24 critical and strategic minerals in Part D of Schedule I of the MMDR Act as these minerals play a very important role in the energy transition, innovations, economy, and security of India.
Involvement of the Private Sector: The MMDRA Act seeks to increase the involvement of private entities in the mining of critical minerals in an effort to improve domestic mining efforts and reduce dependence on imports.
Deregulation of atomic minerals: Some of the atomic minerals like lithium, titanium, niobium, tantalum, zirconium, and beryllium have been deregulated making their mining available for the private sector.
Supply chain resilience: In an attempt to ensure resilience in the domestic supply chain of critical minerals, the MMDRA Act seeks to explore and promote resource security in strategic and clean energy sectors.

(b) Policies and Incentives for Downstream Manufacturing

The Atmanirbhar Bharat, 2020 promotes self-sufficiency in the CETM sector through increased domestic exploration, mining, and processing. The policy simplifies regulatory frameworks and offers financial incentives to attract private investment while fostering sustainable and responsible mining practices.

(i) PLI Schemes:

PLI schemes offer reimbursement-based incentives to original equipment manufacturers (OEMs) depending on their product sales, provided they meet eligibility requirements that encourage local manufacturing. In 2022, India introduced the second phase of the Production-Linked Incentive program for High-Efficiency Solar Photovoltaic Modules, targeting 48 GW of domestic capacity by 2026.¹² As part of this initiative, the government has allocated approximately USD 2.4 billion to strengthen domestic manufacturing of polysilicon, ingots, wafers, solar cells, and modules. To further reinforce this effort, higher import tariffs have been imposed on photovoltaic modules and cells to reduce dependence on foreign suppliers and support local industry growth.

(c) India’s strategic efforts for CETM supply

(i) Mineral Security Partnership

India joined the Minerals Security Partnership (“MSP”) in June 2023, a coalition led by the United States, to work with other major economies on strengthening access to CETMs. Membership may open opportunities for increased investment in India’s critical minerals sector, as well as collaboration in research, development, and knowledge exchange. Additionally, Indian companies investing abroad could potentially gain from pooled financing mechanisms within the MSP for highly vetted strategic mineral projects.

On a geopolitical level, India’s participation reflects a strategic alignment with the US and its allies, and signals reciprocal interest from that group to work closely with India. This association could grant India access to a wider network of technical expertise, funding sources, and global markets at a time when critical minerals are becoming increasingly tied to geostrategic interests. However, MSP membership also carries expectations. The partnership is built on shared principles, meaning India will be required to adhere to MSP standards across its domestic mining operations and overseas engagement.

(ii) Bilateral Agreements

To strengthen critical mineral access, India has formed bilateral partnerships with Australia and Japan. The agreement with Australia focuses on boosting trade, investment, supply chain diversification, and joint research. Meanwhile, the Japan-India Minerals and Metals Partnership aims to secure reliable mineral supplies and enhance cooperation to support both countries’ industrial and technological needs.

(iii) KABIL SPV (2019)

KABIL SPV refers to Khanij Bidesh India Limited (“KABIL”), a special purpose vehicle established as a joint venture among National Aluminium Company Ltd. (NALCO), Hindustan Copper Ltd. (HCL), and Mineral Exploration & Consultancy Limited (MECL) under the Ministry of Mines, Government of India in the equity ratio of 40:30:30.

This is an important initiative to develop critical mineral assets offshore. Its main objective is to explore and acquire useful foreign mining assets, including lithium and cobalt, among others. KABIL seeks to remedy the problem of supply chains by helping India create trading opportunities, G2G collaborations with the producing countries or strategic acquisitions or investments in the exploration and mining assets of these minerals. KABIL collaborates with foreign governments and companies via investments in joint projects, technology transfer and research and development to ensure a reliable supply of mineral resources. As of now, KABIL has partnered with Australia, Argentina and Chile for supply generation of lithium and cobalt.¹³

(iv) Mines And Minerals (Development & Regulation) Amendment Act, 2025

The MMDR Amendment Act, 2025 introduces major reforms that will impact the critical mineral sector in India. One pivotal change is the formal recognition of “mineral exchanges” as approved trading platforms, enhancing transparency and boosting the ease of mineral transactions in the marketplace.

With this amendment, captive miners are now permitted to sell up to 100% of their mineral production in the open market, as opposed to the previous cap of 50%. This liberalisation is expected to significantly improve liquidity, foster competition, and increase the supply efficiency of critical minerals needed for clean energy technologies and other strategic industries.

The NMET has also been fundamentally reformed and renamed as the National Mineral Exploration and Development Trust (“NMEDT”). This expanded mandate allows the Trust to support not only mineral exploration but also the subsequent development of mines and minerals. Importantly, NMEDT’s jurisdiction now covers offshore mineral resources and extends to international mineral development projects, equipping India to secure critical mineral supplies globally as well as domestically.

These adaptive amendments will drive India’s mineral sector towards greater resource security, support new investments, and advance India’s ambition of self-reliance in critical energy transition minerals.

(v) National Critical Mineral Mission

In April 2025, the government launched the National Critical Mineral Mission (“NCMM”), in order to ensure the long-term availability and processing of CETM. The NCMM seeks to secure India’s CETM supply chain by ensuring that the demand is met both from domestic and international sources. Further, it seeks to strengthen the value chain by enhancing technological, regulatory and financial ecosystems to foster innovation and skill development in mineral exploration, mining, beneficiation, processing, and recycling.

Under the NCMM, the Geological Survey of India (“GSI”), has been tasked with conducting 1,200 exploration projects from 2024-25 to 2030-31. The GSI has undertaken 368 exploration projects for critical minerals in the past 3 years for assessing critical mineral deposits.¹⁴ In addition, the Mission provides for a well-defined financial structure, which includes about INR 16,300 crore of government expenditure between 2024 and 2031, along with a proposed investment of nearly INR 18,000 crore by public and private investors.¹⁵ The newly introduced policies provide for the setting up of seven centres of excellence in critical mineral technologies that aim at filing about 1,000 patents by the year 2030.¹⁶ As part of its circular economy goals, the NCMM has also announced an incentive policy of INR 1,500 crores to build India’s critical minerals recycling infrastructure, which includes recycling of lithium-ion batteries and e-waste.¹⁷

(vi) Rationalization of Royalty Rates

In November 2025, the Union Cabinet approved rationalised royalty rates for several CETMs, including caesium, graphite, rubidium, and zirconium. The reform shifts the royalty system for these minerals from a fixed per-tonne rate to an ad valorem structure, where royalties are charged as a percentage of sale value. This change reflects the growing importance of critical minerals in sectors such as EVs, nuclear energy, aerospace, healthcare, and advanced manufacturing, and aims to make mineral exploration in India more commercially viable.

India remains heavily import dependent 100% in the case of key minerals like lithium, nickel, and rare earth elements and recent Chinese export restrictions have intensified concerns over global supply chain vulnerabilities. By rationalising royalty rates, the government aims to attract more bidders in mineral auctions, encourage domestic exploration, and reduce long-term reliance on imports, thereby strengthening India’s critical minerals security.¹⁸

(vii) International Collaborations

To secure vital energy-transition minerals like nickel, cobalt, and lithium, India has sought significant international collaborations to secure vital minerals:

The strategic partnership between India and the UAE has expanded to include cooperation in critical and emerging technologies and CETMs, supporting both nations’ net-zero ambitions and UAE’s collaboration with LOHUM Cleantech to establish Sharjah’s first EV battery recycling facility is a testament to this strategic partnership. The facility will be capable of processing 3,000 tonnes of lithium-ion batteries annually and producing 15 MWh of energy-storage systems.
KABIL has launched the country’s first-ever government-led lithium exploration and mining project. Under an agreement signed on 15 January 2024 with Catamarca’s state-owned enterprise CAMYEN SE, KABIL will undertake the exploration and development of five lithium brine blocks in the Catamarca province of Argentina, covering approximately 15,703 hectares. With an estimated project cost of INR 200 crore, the initiative grants KABIL exclusive rights for exploration and eventual commercial exploitation, strengthening India’s efforts to secure lithium supplies while building technical expertise in brine-based lithium extraction. This will help in enhancing bilateral ties and ensuring a more resilient and diversified supply chain for CETM.¹⁹
India has built strategic cooperation with Australia, a major global supplier of critical minerals. In March 2022, KABIL signed an MoU with Australia’s Critical Minerals Office (CMO) under the Department of Industry, Science and Resources. This partnership aims at collaboration, joint exploration, and long-term supply arrangements for CETMs – lithium and cobalt.²⁰

CONCLUSION

Given the central role of CETMs in enabling modern technologies, India’s approach to CETM should be guided by global market patterns, geopolitical shifts, and evolving economic conditions.

Rising geopolitical friction such as US-China tensions and sanctions on nations like Russia and Venezuela underscore the importance of supply diversification. To reduce vulnerability associated with dependence on a single supplier, India must diversify its international partnerships and sourcing strategies and engage with resource-rich regions including Australia, Canada, and parts of Africa. Trade agreements, diplomacy, and strategic alliances will be crucial for ensuring long-term access to critical resources.

India is increasingly viewed by western nations as a strategic balance to China, opening doors to initiatives like the MSP and bilateral mineral agreements, such as with Australia. These collaborations offer mutual advantages: India gains secure access to essential minerals and technology, while partner countries benefit from capital flows and early access to one of the world’s fastest-growing mineral markets.

Recent reforms, such as the rationalisation of royalty rates, are a positive step toward making the sector more competitive. Securing long-term and diversified supplies of critical minerals will also be crucial for India to meet its climate commitments, including its goal of reducing the emissions intensity of GDP by 45%.²¹