NEW DELHI: As India pushes forward with its target of achieving 500 GW of renewable energy capacity by 2030 and a 30% transition to electric mobility, the demand for key minerals such as lithium, cobalt, and rare earth elements (REEs) is expected to surge exponentially.
A report released by FICCI on February 21, titled “Recovery of Critical Minerals from Mine Tailings and Overburden”, highlights the government’s series of policy measures and investments aimed at strengthening domestic production and reducing reliance on imports.
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The government’s steps to enhance India’s critical minerals supply chain include allowing private sector participation in mining and amending regulations to expedite mineral block auctions.
The report highlights that since November 2023, 24 critical mineral blocks have been auctioned.
Additionally, royalty rates for minerals such as beryllium, cobalt, and titanium have been rationalized, and area limits for prospecting and mining leases have been expanded.
A newly introduced Exploration Licence aims to attract Foreign Direct Investment (FDI) and encourage small-scale mining enterprises by offering a cost-sharing mechanism for mineral exploration projects.
State-run Khanij Bidesh India Ltd. (KABIL) is actively working to secure critical mineral supplies through global partnerships.
KABIL has commenced lithium exploration in Argentina’s Fiambalá region and signed agreements with companies in the UAE, ONGC Videsh, and Oil India to explore international mining opportunities.
Additionally, KABIL has partnered with the Council of Scientific and Industrial Research – Institute of Minerals and Materials Technology (CSIR-IMMT) for technical cooperation in mineral processing and metal extraction.
The government also launched the National Critical Mineral Mission in January 2025, with an outlay of ₹34,300 crores.
This initiative includes investments from the central government, public sector enterprises, and private industry. The Union Budget 2025-26 identifies mining as one of six priority sectors for transformative reforms over the next five years.
Additionally, the government has introduced policies to recover critical minerals from tailings and removed customs duties on essential scrap materials used in critical mineral recycling. These measures aim to strengthen India’s mineral security and reduce dependence on imports.
The report also highlighted that, despite possessing deposits of several critical minerals, India’s domestic production remains inadequate.
The country is entirely dependent on imports for minerals such as cobalt, lithium, beryllium, and tungsten due to several challenges hindering the growth of its critical minerals industry, including:
Limited Quality Reserves: India lacks proven reserves for key minerals such as cobalt, niobium, germanium, and rhenium, discouraging investor interest. Nearly half of the 49 critical mineral blocks offered for auction remain unclaimed.
Economic Extraction Barriers: While lithium resources have been identified in Jammu and Kashmir, current technological limitations make economic extraction difficult.
Mine Development Challenges: Land acquisition issues, resettlement complexities, and long project timelines pose significant obstacles to establishing new mining operations.
Lack of Advanced Processing Facilities:Despite possessing large reserves of titanium and REEs, India relies heavily on imports due to the absence of commercial-scale processing technologies.
Need for a Skilled Workforce: Recognizing the need for expertise in mineral exploration and processing, the government has allocated INR 100 crores to establish skill development centers.
