Strengthening India’s Mineral Security

This editorial is based on “Resource rush: Current crisis highlights the need to double down on mineral security, rework policies” which was published in The Financial Express on 23/03/2026. This editorial explores the strategic imperatives of India’s mineral framework. It provides a comprehensive roadmap for navigating import dependencies while catalyzing a self-reliant, circular mineral economy.

For Prelims:Critical Mineral Mission,  MMDR Amendment Act, Rare Earth Elements (REE), Mission Samudra Manthan. 

For Mains:India’s progress towards mineral security, key challenges, and measures needed.

India’s mineral security has emerged as a critical strategic concern amid rising geopolitical disruptions, exposing its heavy import dependence. Nearly 100% of key critical minerals like lithium and cobalt are imported. At the same time, the share of mining in India’s GVA has declined from 4.8% (1999-2000) to nearly 2%, reflecting weak domestic capacity. This combination of external dependence and domestic underperformance underscores the urgency of strengthening India’s mineral security framework. 

What are the Recent Developments Shaping India’s Mineral Security Framework? 

• Institutionalizing Resource Security: The establishment of the National Critical Mineral Mission (NCMM) represents a foundational shift from treating minerals as mere commodities to vital strategic assets.  
  • This holistic framework addresses the entire value chain, from upstream exploration to downstream recycling, ensuring long-term resilience against global supply shocks.  
  • Backed by a massive ₹34,300 crore outlay over 7 years, the mission fundamentally derisks India's green energy transition.  
    • Under this mission, the Geological Survey of India (GSI) has been tasked with conducting 1,200 exploration projects from 2024-25 to 2030-31.  
• Widening Transparent Auction Frameworks: The transition to a technology-driven, transparent e-auction mechanism has successfully dismantled historical allocation bottlenecks and fostered cooperative federalism.  
  • By empowering states to manage and profit from their resource wealth, the framework has drastically accelerated the operationalization of mining leases.  
  • India’s mineral sector has achieved a significant milestone in the financial year 2025–26 with the successful auction of 200 mineral blocks, the highest ever in a single year. 
    • State-level efficiency surged, with Gujarat (32 blocks), Rajasthan (30 blocks), and Tamil Nadu (22 blocks) leading the national tally. 
• Aggressive Global Asset Acquisition via KABIL: India is actively mitigating its geographic vulnerabilities by pivoting from passive market purchasing to aggressive equity ownership in foreign mining assets.  
  • This proactive overseas strategy ensures direct control over the supply of highly concentrated materials like lithium and cobalt, shielding domestic industries from geopolitical chokepoints.  
  • Khanij Bidesh India Limited (KABIL) recently operationalized its exploration footprint across a 15,703-hectare lithium block in Argentina's Catamarca province.  
    • Furthermore, KABIL is actively expanding this blueprint by pursuing similar value-chain partnerships in resource-rich geographies like Australia and Chile. 
• Offshore Hydrocarbon Expansion: India is shifting from incremental drilling to a "mission-mode" strategy to unlock massive, previously underexplored deepwater and ultra-deepwater oil and gas reserves.  
  • This strategy effectively de-risks frontier basins through international technical partnerships and massive capital commitments, aiming to reverse the trend of rising crude import dependency (which hit 88.2% in FY25).  
  • In this direction, the government has proposed an ambitious plan of Mission Samudra Manthan, signalling a major scale-up in offshore exploration efforts. 
• Transitioning to a Regulated Mineral Exchange Ecosystem: The Mines and Minerals (Development and Regulation) Amendment Act, 2025, has fundamentally restructured the mining market by institutionalizing Mineral Exchanges, moving the sector away from opaque bilateral contracts toward transparent, electronic trading.  
  • This reform enables real-time price discovery and allows captive miners to sell surplus production without arbitrary caps, significantly increasing the domestic availability of industrial raw materials.  
  • The Indian Bureau of Mines (IBM) was officially appointed as the regulator for these exchanges in late 2025 to prevent market manipulation.  
• Catalyzing Private Sector Participation: Mines and Minerals (Development and Regulation) Amendment Act, 2025, have effectively crowd-sourced capital and cutting-edge technology by unlocking the exploration sector to private enterprises.  
  • This strategic liberalization shifts the financial and operational risk from public exchequers to specialized private players, accelerating the pace of domestic discoveries.  
  • Private entities are rapidly capitalizing on this, with companies like Vedanta securing 10 critical mineral blocks covering cobalt, vanadium, and rare earths.  
    • Similarly, Hindustan Power recently secured a highly strategic 200 sq km Platinum Group Elements (PGE) block in Madhya Pradesh. 
• Financial De-risking and Regulatory Agility: The government has structurally lowered entry barriers and enhanced the ease of doing business in the mining sector by introducing flexible financial instruments.  
  • Moving away from rigid capital-locking mechanisms prevents bidder fatigue and ensures deeper participation from mid-tier mining and exploration companies. 
  • The newly introduced Mineral (Auction) Amendment Rules 2026 permit the use of Insurance Surety Bonds as a highly liquid alternative to traditional bank guarantees.  
  • Leveraging this agile framework, the Ministry of Mines launched its 7th auction tranche in March, 2026, successfully offering 19 new strategic blocks. 
• Pioneering the Circular Mineral Economy: To alleviate the immense pressure on primary extraction and reduce environmental footprints, India is decisively embedding circular economy principles into its mineral security framework.  
  • Establishing a robust domestic recycling ecosystem acts as a secondary, highly reliable domestic "mine," transforming end-of-life tech waste into valuable manufacturing inputs.  
  • In the Budget 2025, Indian Finance Minister announced the exemption of customs duties on cobalt powder and waste, lithium-ion battery scrap, lead, zinc, and 12 critical minerals, a move aimed at accelerating India’s energy transition. 
    • In late 2025, the Union Cabinet rolled out a dedicated ₹1,500 crore incentive scheme to rapidly scale the recycling capacity for critical minerals from e-waste.  
• Bridging the Midstream Processing Gap: Acknowledging that extracting raw ore is insufficient without midstream processing capabilities, India is heavily directing capital toward extractive metallurgy and R&D.  
  • This strategic pivot ensures the country captures the highest value segments of the mineral supply chain, preventing it from remaining a mere exporter of raw materials.  
  • In November 2025, the government launched the ₹210 crore ANRF-MAHA CRM Research Program to fund advanced recovery technologies.

What are the Key Issues Undermining India’s Mineral Security? 

• Critical Midstream Processing Gap: While India is accelerating extraction, it lacks the advanced "smelting and refining" infrastructure required to convert raw ores into high-purity industrial inputs.  
  • This creates a "value-chain trap" where India exports raw bauxite or iron ore only to import high-value aluminum and steel alloys. 
  • India today imports 80- 90% of its magnets and related materials from China, which controls more than 90% of global Rare Earth Elements (REE) processing.  
    • Despite the discovery of lithium in Jammu & Kashmir, India currently has limited capacity to operate commercial-scale refineries for producing battery-grade lithium carbonate. 
• Geopolitical Vulnerability of Chokepoints: India’s heavy reliance on the Strait of Hormuz extends beyond crude oil and LNG to critical industrial inputs such as sulphur and copper wires largely sourced from West Asia. 
  • Any disruption in this narrow maritime corridor can severely affect chemical industries, and downstream manufacturing, amplifying economic shocks. 
    • This immediately translates into domestic hyper-inflation and a deteriorating Current Account Deficit (CAD). 
• Stagnant Mining Sector GVA: The mining sector’s contribution to the national economy has remained pathologically low, failing to keep pace with the overall GDP growth of the country.  
  • This stagnation signals under-utilization of domestic resources and a lack of deep-seated structural productivity in the extractive industries. 
  • The gross value added (GVA) of the mining & quarrying sector accounts for only 2 percent of the country's GDP. (as of July 2024). 
  • India’s copper demand is projected to skyrocket to 20 million tonnes by 2050, yet domestic production lags significantly with a 55% import dependency. 
• High "Risk-Premium" for Private Explorers: The "high-risk, high-reward" nature of deep-seated mineral exploration is deterred by a lack of geological data transparency and long gestation periods.  
  • Without a robust "Junior Mining" culture, the burden of discovery remains almost entirely on the state, which lacks the agility of private venture capital.  
  • Countries like Australia and Canada spend over US$5,000 per square kilometre on potential mining leases, whereas India spends barely US$9 per sq km despite its vast mineral resources. 
• Fragmentation of Resource Governance: Mineral security is currently hindered by "overlapping jurisdictions" between the Union and State governments, leading to delays in "Forest & Environment Clearances."  
  • This federal friction often results in auctioned blocks remaining "non-operational" for years, locking up vital capital.  
  • For instance, several coal blocks auctioned under the commercial coal mining reforms (post-2020) have faced delays due to pending forest clearances and land acquisition issues, slowing their operationalisation. 
    • Similarly, iron ore mining in Odisha and Karnataka has historically experienced disruptions due to environmental litigation and regulatory approvals, highlighting governance bottlenecks. 
• Lagging Technology in Deep-Seated Mining: India possesses significant "surficial" deposits (like Iron and Bauxite) but lacks the "Directional Drilling" and AI-driven seismic tech needed for deep-seated minerals (Copper, Gold, REEs).  
  • Despite known reserves, projects like the Malanjkhand Copper Project have faced limitations in scaling deep exploration due to technological constraints. 
    • This technological deficit makes domestic extraction of critical minerals more expensive than importing them. Due to this, India now imports over 90% of its refined copper needs.  
  • Similarly, India’s REE potential (monazite-rich beach sands in Kerala) remains underutilised due to limited advanced extraction and processing technologies, leading to continued dependence on imports. 
• Absence of a Strategic Mineral Reserve (SMR): Unlike petroleum, India has no centralized "Strategic Reserve" for critical minerals like Lithium, Cobalt, or Nickel to buffer against supply chain shocks.  
  • India’s continued reliance on a “Just-in-Time” procurement model exposes its manufacturers to sharp global price fluctuations. 
  • For instance, during the 2022 global nickel price spike on the London Metal Exchange (LME), prices briefly surged over 2× within days, disrupting supply chains for battery and stainless-steel industries. 
    • Similarly, Indian EV and electronics manufacturers remain vulnerable to lithium and cobalt supply shocks, largely controlled by countries like China, underscoring the strategic need for buffer reserves. 
• Underdeveloped Circular Economy Ecosystem: The "Urban Mining" sector (extracting minerals from e-waste and spent batteries) remains largely informal and technologically primitive in India.  
  • This leads to the loss of valuable secondary resources that could otherwise reduce dependence on primary imports.  
  • India grapples with a surging e-waste crisis, generating over 1.6 million metric tonnes annually, growing at 23%. Informal sectors handle 95% of this. 
    • Economically, India’s e-waste holds a whopping untapped potential, estimated at around $6 billion from recoverable materials, primarily metals extracted through recycling.  
    • Efficient formal recycling and metal recovery could reduce India’s metal import demand by up to $1.7 billion and support a circular economy.

What Steps Can India Take To Further Strengthen Its Mineral Security? 

• Integration of "Junior Mining" Ecosystems: India must formalize a high-risk exploration tier by providing "Flow-Through Share" tax incentives to attract specialized junior mining companies.  
  • This model shifts the initial financial burden of "Greenfield" discovery from the state to agile, venture-capital-backed firms equipped with niche geological expertise.  
  • By creating a dedicated "Exploration Exchange" for these startups, India can accelerate the conversion of G4 (reconnaissance) data into G1 (mineable) reserves. 
• Establishment of National Mineral Processing Zones (MPZs): To break the midstream monopoly held by external powers, India should establish specialized "Mineral Processing Parks" with shared "Plug-and-Play" infrastructure and common effluent treatment plants.  
  • These zones would provide localized economies of scale for smelting, refining, and alloying, specifically targeting battery-grade purity levels for Lithium and Cobalt.  
  • Strategic colocation near major ports or industrial corridors would minimize the "logistics tax" and ensure a seamless flow from raw ore to high-tech manufacturing. 
• Operationalizing a Strategic Mineral Buffer (SMB): Mirroring the Strategic Petroleum Reserves, India must create a physical and "paper" stockpile of critical minerals to hedge against sudden supply chain shocks or maritime blockades.  
  • This involves a state-led "Counter-Cyclical Procurement" strategy, buying minerals when global prices are low and releasing them to domestic industries during crises.  
  • Such a buffer provides a critical "macro-economic shock absorber," ensuring that domestic EV and aerospace production does not grind to a halt during geopolitical friction. 
• "Urban Mining" via Mandatory Extended Producer Responsibility (EPR): India must transition from a "Linear Extraction" model to a "Circular Mineral Economy" by strictly enforcing tech-integrated EPR frameworks for lithium-ion batteries and e-waste.  
  • By subsidizing high-yield hydrometallurgical recycling plants, the country can recover rare earth elements and precious metals from retired electronics at a fraction of the energy cost of primary mining. 
  • This creates a "Secondary Domestic Mine" that grows proportionally with domestic consumption, significantly reducing long-term import reliance. 
• Deploying AI-Driven Deep-Seated Exploration: The Ministry of Mines should deploy an "Open-Access National Geospatial Data Repository" integrated with Artificial Intelligence and Machine Learning algorithms for predictive mineral mapping.  
  • Moving beyond surficial deposits requires "Directional Drilling" and "Aero-Magnetic Surveys" to identify deep-seated "blind" deposits that are not visible to traditional geological methods.  
  • Digitizing the "National Repository of Core Rocks" would allow global experts to remotely analyze India’s subterranean potential, drastically shortening the "Discovery-to-Production" cycle. 
• Diplomacy through "Resource-for-Infrastructure" Swaps: India should leverage its "Global South" leadership to negotiate bilateral "Mineral-for-Market" or "Mineral-for-Infrastructure" deals with resource-rich nations in Africa and Latin America.  
  • By offering technological cooperation, digital public infrastructure (DPI), or healthcare systems in exchange for long-term "Off-take Agreements," India can bypass the competitive bidding wars of the open market.  
  • This "Strategic Barter" mechanism secures a captive supply chain while building deep-rooted geopolitical alliances that are resistant to third-party pressure. 
• Single-Window "Green-Channel" Clearances: To eliminate the "Clearance Paralysis" between Union and State governments, India should implement a blockchain-based "Unified Mineral Regulatory Portal" for time-bound environmental and forest approvals.  
  • Implementing a "Deemed Approval" clause (where clearances are granted automatically if not processed within a specific timeframe) would provide the regulatory certainty required to attract large-scale foreign direct investment.  
  • This harmonizes federal friction and ensures that auctioned blocks reach the "First-Ore" stage within 24 months. 
• Indigenous Extractive Metallurgy R&D: The government must fund "Deep-Tech Moonshots" focused on low-carbon, high-efficiency extractive metallurgy to process India’s unique, low-grade mineral ores.  
  • Developing indigenous "Ion-Exchange" or "Bio-Leaching" technologies would allow India to economically extract minerals from deposits currently deemed "unviable" by global standards.  
  • By incentivizing "Public-Private Research Consortiums," India can own the Intellectual Property (IP) for the next generation of mineral processing, transforming from a "Technology Taker" to a "Technology Provider." 
• Creating a Sovereign "Mineral Wealth Fund": India should establish a dedicated "Sovereign Mineral Acquisition Fund" to provide low-cost, long-term credit to Indian PSUs and private giants for acquiring high-value overseas mining equity.  
  • This fund would act as a "Strategic War Chest," allowing Indian firms to bid aggressively for distressed or Tier-1 assets globally during market downturns.  
  • By de-risking the capital-intensive nature of overseas acquisitions, the government ensures that Indian industry has a direct stake in the global "Upstream" resource pie. 

Conclusion: 

India’s transition from a "resource taker" to a "strategic mineral power" hinges on bridging the critical midstream processing gap and de-risking private exploration. While initiatives like the National Critical Mineral Mission (NCMM) provide a robust institutional roadmap, success requires harmonizing federal governance and operationalizing strategic buffers. Ultimately, mineral security is the linchpin of India’s green energy sovereignty and long-term industrial competitiveness in a fragmented global order. 

Drishti Mains Question

“Mineral security is central to India’s economic growth and energy transition.” Discuss the key challenges in achieving mineral security and suggest a comprehensive strategy to address them.

 

FAQs

1. What is the primary goal of the National Critical Mineral Mission?
To secure India's entire mineral value chain through a ₹34,300 crore outlay, focusing on exploration, recycling, and processing.

2. How does 'Urban Mining' help mineral security?
It recovers strategic metals like Lithium and Cobalt from e-waste, creating a secondary domestic resource loop.

3. What is the significance of KABIL’s Argentina deal?
It secures direct equity ownership of lithium brine blocks, ensuring a steady supply for India's EV battery manufacturing.

4. Why is the 'Strait of Hormuz' critical for India?
It is a global chokepoint through which 20% of global oil and nearly half of India's energy imports transit.

5. What is 'Junior Mining'?
Small, agile private companies that specialize in high-risk, early-stage mineral exploration and discovery. 

UPSC Civil Services Examination Previous Year Question (PYQ)  

Prelims: 

Q. With reference to the management of minor minerals in India, consider the following statements: (2019) 

1. Sand is a ‘minor mineral’ according to the prevailing law in the country 
2. State Governments have the power to grant mining leases of minor minerals, but the powers regarding the formation of rules related to the grant of minor minerals lie with the Central Government. 
3. State Governments have the power to frame rules to prevent illegal mining of minor minerals. 

Which of the statements given above is/are correct? 

(a) 1 and 3 only  

(b) 2 and 3 only  

(c) 3 only  

(d) 1, 2 and 3  

Ans: (a) 

Q. What is/are the purpose/purposes of ‘District Mineral Foundations’ in India? (2016)

1. Promoting mineral exploration activities in mineral-rich districts 
2. Protecting the interests of the persons affected by mining operations 
3. Authorizing State Governments to issue licenses for mineral exploration 

Select the correct answer using the code given below: 

(a) 1 and 2 only  

(b) 2 only  

(c) 1 and 3 only  

(d) 1, 2 and 3  

Ans: (b) 

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Mains 

Q. Despite India being one of the countries of Gondwanaland, its mining industry contributes much less to its Gross Domestic Product (GDP) in percentage. Discuss. (2021)

Q. “In spite of adverse environmental impact, coal mining is still inevitable for development”. Discuss. (2017)