CRITICAL MINERALS BLOCK - ECONOMY

CRITICAL MINERALS BLOCK - ECONOMY

News: 20 critical mineral blocks to go on sale

What's in the news?

●       The auction of critical mineral blocks represents a significant step toward enhancing domestic mineral production and reducing reliance on imports, especially for minerals crucial to industries like electric vehicles, consumer electronics, and energy storage.

Critical Minerals:

1. Critical minerals are those with high economic importance and high supply risk due to factors like limited availability, geopolitical issues, environmental concerns, or technological challenges.
2. Lithium, graphite, rare earth elements (REEs), cobalt, nickel, vanadium, antimony, beryllium and bismuth. Essential for green energy, high-tech, aviation, defence and healthcare.
3. The Ministry of Mines collaborated with stakeholders to identify 30 critical minerals based on criteria like demand-supply gap, import dependence, strategic importance and potential for domestic production.

Import dependency of India for Critical minerals:

●       In FY23, India imported 2,145 tonnes of lithium carbonate and lithium oxide at a total cost of Rs 732 crore. Lithium carbonate contains up to 19 per cent lithium. Lithium oxide, which is usually converted to lithium hydroxide, contains 29 per cent lithium.

●       India also imported 32,000 tonnes of unwrought nickel at a cost of Rs 6,549crore and 1.2 million tonnes of copper ore at a cost of Rs 27,374 crore, in 2022-23.

●       India is 100 per cent reliant on imports for its lithium and nickel demand. For copper, this figure is 93 per cent.

Auctioning of Critical mineral blocks to reduce import dependency:

●       The auction encompasses 20 blocks spread across eight states: Tamil Nadu, Odisha, Bihar, Uttar Pradesh, Gujarat, Jharkhand, Chhattisgarh, and Jammu & Kashmir.

○       Mining Licenses (4): Immediate mining operations can begin upon obtaining the necessary clearances. These blocks contain deposits of minerals like nickel, copper, graphite, manganese, and molybdenum.

○       Composite Licenses (16): These blocks allow licensees to conduct further geological exploration to ascertain the presence and scale of mineral reserves. The licensees can apply to convert CLs to MLs after gathering adequate data on mineral deposits.

●       Various critical minerals such as lithium, nickel, copper, and rare earth elements (REEs) have been identified across different blocks with varying inferred reserves.

Clearance Requirements:

●       Licensees need to obtain 15 approvals and clearances, including forest clearance, environmental clearance, Gram Sabha consent, etc.

●       Approximately 17% (1,234 hectares) of the total concession area (7,197 hectares) is forest land, subject to approvals through the PM Gati Shakti portal.

Future Steps and Initiatives

●       India heavily relies on imports for critical minerals like lithium, nickel and copper, highlighting the strategic significance of developing domestic sources. After this auction, plans are underway for another round of critical mineral block auctions.

●       The Geological Survey of India has undertaken numerous projects to explore critical mineral reserves across the country.

●       There's a recommendation to establish a Center of Excellence for Critical Minerals to formulate policies and incentivize the development of a complete value chain for these minerals within the country.