The Union Ministry of Mines, signed a memorandum of understanding (MoU) with the International Energy Agency (IEA) this November 13 for cooperation in the critical mineral domain. This partnership aims to make India’s mining practices compliant with international standards and improve the sharing of knowledge, technology transfer, and skill development in managing critical mineral resources and innovative extraction methods. Additionally, this marks a significant milestone for India in enhancing its niche capabilities in critical mineral recycling procedures through data collection, modeling, and resource analysis.
Earlier in May, IEA published its second annual “Global Critical Minerals Outlook Report,” in which it highlighted robust demand growth for critical minerals, especially lithium, which sees a 30% overall increase in demand, followed by nickel, cobalt, graphite, and rare earth elements due to substantial expansion of electric car adoption and clean energy network deployments in emerging economies.
The report further raised concern about the potential disruption in the supply chain due to the heavy concentration of mining and refining of these materials in specific geographical boundaries like China, Australia and Latin America. This concentration poses a significant risk to the global supply chain because disruptions in these regions could cause shortages and price fluctuations in critical minerals.
In line with the above, both the Ministry of Mines and the IEA have organised workshops and stressed the importance of critical mineral recycling. Recycling critical minerals is vital for maintaining sustainable supply chains, driving innovation, reducing import dependency and enhancing environmental sustainability in the long-term.
Previously, the IEA published one of the first-of-its-kind reports on critical minerals in 2021, where it presented key policy recommendations to scale up the recycling process of critical minerals. Another IEA report showed that the establishment of dedicated recycling infrastructure could reduce new mining activity needs for copper and cobalt by 40% and lithium and nickel by 25% by the end of 2050. Moreover, IEA’s critical mineral policy tracker, where it projected the market value of recycling of critical minerals could grow and reach up to $200 billion by 2050.
Over the years, India has long relied on imports for critical minerals. In FY 2022-23, India’s import reliance was 100% for lithium, 93% for copper ore and concentrates, 100% for cobalt, and 100% for nickel. In FY 2023-24, it spent a staggering amount of Rs 34,000 crore importing lithium, graphite, cobalt, and nickel, lithium being the top import, followed by graphite and cobalt.
China has continued to be the dominant country, accounting for a total of 56.3% of India’s critical mineral imports. India’s continued reliance on China poses a significant and immediate risk to its national security and economic stability and renders it vulnerable to potential supply chain disruptions, trade embargoes, and price manipulation.
China’s dominance in the global critical mineral supply chain is alarming: it holds a near-monopoly, controlling roughly 70% of production, over 85% of processing, around 90% of key finished products, and 85-90% of mine-to-metal refining. Moreover, China has a history of weaponising these supplies to gain geopolitical leverage, as evidenced by its recent ban on key mineral exports to the United States.
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Earlier it was reported that the Ministry of Mines plans to introduce a production-linked incentive scheme to enhance recycling and attract investments in critical mineral recycling technologies, as recommended by NITI Aayog and in line with the Battery Waste Management Rules, 2022. These rules require a minimum percentage of material recovery from used lithium-ion batteries in electric vehicles, to be implemented in a phased manner starting from 2026.
In the 2024 budget, the Union government even announced the establishment of a critical mineral mission. This plan prioritised domestic production and overseas acquisition, while underscoring the importance of a skilled workforce, advanced research and development, financing mechanisms, and extended producer responsibility for establishing effective recycling processes for critical minerals.
Additionally, India became the first developing country to join the US-led mineral security partnerships in June 2023. One of the primary focuses of this forum is to secure a sustainable supply of these materials by focusing on the secondary recovery through recycling. Further, during the sixth consecutive India-US commercial dialogue, both the countries had signed a memorandum to “expand and diversify critical mineral supply chains”. A crucial aspect of this agreement is to improve business and investment to leverage each other’s strengths and achieve mutual benefits, especially in the recycling process.
India’s low private investments, high import dependency, and limited technological know-how have hindered the development of a robust domestic production of critical minerals from primary sources. The recycling initiative, focusing on secondary sources like e-waste, is a crucial step towards self-sufficiency. By increasing the availability of domestic mineral sources, it will reduce reliance on imports. According to experts, establishing dedicated recycling facilities could reduce primary sourcing of critical minerals by approximately 18%, saving around 1,500 kilotons of critical minerals over the next two decades.
India, being the world’s third largest CO2 emitter with a 6.67% share of total global greenhouse gas emissions, has set ambitious climate goals including becoming a net zero emission country by 2070, achieving half of its cumulative electric power installed capacity from renewable energy sources by 2030, and capturing a 30% share of total electric vehicle sales by the same.
In 2021, India launched a semiconductor mission, with a total financial outlay of Rs 76,000 crore, aimed to boost the domestic manufacturing of the semiconductors, the backbone of the modern electronics and communication infrastructure. Additionally, India continues to engage in indigenous defense production, aiming for Rs 3 lakh crore defence production by 2029 to solidify its position as a manufacturing hub of global defence. Critical minerals are vital for reaching these goals as they are key elements in technologies like solar panels, wind turbines, electric vehicle batteries, manufacturing of chips and cutting-edge defence technologies.
A recent study by the Centre for Social and Economic Progress projected that the critical minerals requirements for India’s battery storage technologies and its solar and wind installations will exponentially increase in the future, further emphasising the use of recycling and recycled materials. In summary of the report, the mineral demands for India in the upcoming fiscal year are as follows – 17 tonnes of cobalt, 647 tonnes of molybdenum, 2,629 tonnes of nickel, 58 tonnes of lithium, 609 tonnes of graphite, and 73,954 tonnes of silicon.
By 2047, the demand for cobalt is expected to increase to 5,914 tonnes, molybdenum to 2,309 tonnes, nickel to 26,203 tonnes, lithium to 20,845 tonnes, graphite to 217,884 tonnes, and silicon to 197,077 tonnes. In order to meet the growing need for critical minerals, the country must strategically plan and invest in upgrading its recycling technologies.
The recycling process for these materials involves recovering critical minerals from end-of-life products, a method known as urban mining. This approach enables the recovery of critical minerals from discarded electronics, batteries, and other electronic goods. Global research and innovation focus on recovering critical minerals from discarded products at the end of their lifecycle. Two prominent methods include hydrometallurgy, which separates minerals by submerging the cathode of a lithium-ion battery in a solution, and pyrometallurgy, which achieves similar results using high temperatures. Additionally, mine tailings – fine-grained by-products from extracting raw minerals – are utilised as a recycling method, involving the extraction of valuable minerals from waste left behind after traditional mining.
Countries like Belgium, Japan, and South Korea have established advanced recycling facilities and implemented policies to promote critical mineral recycling from electronic waste, magnets, and industrial scrap. Meanwhile, nations such as South Africa, Australia, and Sweden have invested in innovative research on recovering critical minerals from mine tailings.
However, these approaches have several shortcomings. For instance, recycling processes may compromise the quality of the recovered material. Moreover, advanced recycling technologies entail high initial costs, and scaling up these processes to meet industry demands is challenging due to informal and underdeveloped end-of-life product waste collection.
As the third-largest global producer of e-waste, generating approximately 3.2 million tons per year, India can transform the challenges of managing e-waste into an opportunity to establish a robust circular supply chain for critical minerals. This would create a sustainable resource loop. To achieve this, India must refine its policies, ensure effective implementation, and establish advanced recycling facilities. These facilities should employ methods like solvent extraction and ion exchange to recover valuable minerals from waste materials, develop efficient separation and purification techniques, and promote mineral collection and processing.
By collaborating with industries, private players, and international stakeholders, India can achieve strategic autonomy and build a robust, sustainable supply chain of valuable resources like critical minerals in the coming years.
Mahesh Ganguly, a junior research fellow in International Relations and Area Studies, currently based at MMAJ Academy of International Studies, Jamia Millia Islamia, New Delhi. Haider Ali did his post graduation from Centre for the Study of Social Exclusion and Inclusive Policy, Jamia Millia Islamia, New Delhi.