Source: WEF
Subject: Strategic Minerals
Context: Recent supply disruptions—especially China’s export restrictions on antimony, a key input for semiconductors and defence systems—have highlighted the strategic vulnerabilities of global critical mineral supply chains.
About Strategic Vulnerabilities of Global Critical Mineral Supply Chains:
What are Critical Minerals?
- Critical minerals are strategic, non-fuel mineral resources essential for high-tech manufacturing, clean energy, semiconductors, defence systems, and advanced electronics, whose supply chains face high risk of disruption.
- They include lithium, cobalt, nickel, antimony, rare earth elements, graphite, gallium, etc., and are vital for national security, green transition and advanced technology industries.
Why Critical Minerals are Important?
- Energy Transition: Required for solar panels, lithium-ion batteries, EVs, wind turbines and hydrogen technologies.
- National Security: Crucial for missiles, jet systems, radar, telecom, semiconductors and high-energy defence systems.
- Economic Competitiveness: Countries controlling mineral supply chains dominate future industries (AI, robotics, clean tech, electronics).
- Strategic Autonomy: Reduces dependence on single suppliers like China, enhancing national and industrial resilience.
Trends in Critical Mineral Geopolitics:
- Export Controls Rising: China restricted exports of antimony, gallium and germanium; Russia tightened control of palladium; Indonesia banned nickel ore exports.
- Surging Demand: EV and renewable energy boom has pushed global demand for critical minerals up by over 300% in a decade (IEA 2024).
- Price Volatility: Antimony prices surged nearly 10x after China’s 2024 restrictions, revealing fragile supply chains.
- Allied Coordination: U.S.–Australia, EU–Canada and Quad are forming mineral alliances for secure supply.
- Shift to Mineral-specific Strategies: Countries increasingly mapping each mineral’s supply bottlenecks (DARPA-supported Critical Minerals Forum).
Challenges to Critical Mineral Security:
- Geopolitical Concentration: China, Russia, Tajikistan and DRC dominate mining and processing of many minerals, creating single-supplier dependence.
- Underinvestment in Mining: Low prices for decades discouraged exploration and production; mining capacity lags behind rising demand.
- Environmental & Social Risks: Mining often causes pollution, land conflict and ecosystem damage, making expansion politically sensitive.
- Opaque Supply Chains: Hidden subsidies, unregulated artisanal mining, and monopolistic price manipulation distort markets.
- Slow Permitting Processes: U.S. and EU mining approvals take 7–10 years, delaying domestic production.
- Refining–Mining Mismatch: Refining capacity exists, but raw ore supply (mining) is the bottleneck for minerals like antimony.
Initiatives Taken:
- Global:
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- U.S. Executive Order on Mineral Security: Faster permitting, stockpiling, and domestic mining support.
- UK Critical Minerals Strategy: Mapping vulnerabilities and supply partnerships.
- Allied Frameworks: U.S.–Australia, EU–Canada, Japan–EU, Quad collaboration on rare earths and battery minerals.
- India:
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- Critical Minerals List (2023): Identified 30 minerals essential for strategic sectors.
- National Mineral Exploration Trust (NMET): Boosting exploration funding.
- KABIL Joint Venture: Securing mineral assets abroad (Argentina, Australia, Chile).
- PLI Schemes: Supporting battery manufacturing, solar PV, and EV ecosystem to reduce import dependence.
Way Forward (Recommendations):
- Mineral-Specific Strategies: Avoid one-size-fits-all; customise policy by mineral (antimony, lithium, gallium, etc.).
- Long-term Offtake Agreements: Provide price stability to producers and reduce dependence on volatile spot markets.
- Allied Supply Chains: India, U.S., EU, Japan, Australia must build “trusted mineral corridors” and joint reserves.
- Expanding Ethical Mining: Strengthen standards, improve transparency and support ESG-compliant mining.
- Accelerate Domestic Exploration: Fast-track permits, use AI/remote sensing, and incentivise private-sector mining.
- Invest in Refining & Recycling: Boost processing capacity and develop circular economy systems for lithium, cobalt and rare earths.
- Strategic Stockpiles: Build national reserves of key minerals like germanium, gallium, antimony, cobalt and nickel.
Conclusion:
Critical minerals are now at the heart of geopolitical competition, industrial competitiveness and national security. Countries that secure reliable mineral supply chains will lead the clean-tech and defence industries of the future. India must adopt a proactive, diversified and cooperative strategy to avoid future vulnerabilities and ensure economic and strategic resilience.
