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The country needs a carefully crafted multi-dimensional mineral policy to address the issues posed by uneven distribution of rare earth elements, the Economic Survey on Tuesday said.
Cobalt, copper, lithium, nickel, and rare earth elements (REEs) are critical for producing electric vehicles and batteries and harnessing solar power and wind energy.
"While the demand for critical minerals is set to increase because of the global preference and emphasis towards renewable energy, the global supply chain of the critical minerals is highly concentrated and unevenly distributed. The skewed distribution of the resource poses a supply risk in the face of its enhanced demand.
"A carefully crafted multi-dimensional mineral policy would reduce our dependence and address the problems for the future," the Economic Survey 2022-23 said.
The country has resources of nickel, cobalt, molybdenum and heavy REEs, but further exploration would be required to evaluate the quantities of their reserves.
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There is a need to create strategic mineral reserves along the lines of strategic petroleum reserves to ensure a continuous supply of minerals, it said.
Also, policies should consider investing in internal research, including technological innovation for mineral exploration and processing and the development of recycling, reusing, and repurposing technologies.
The shift to a clean energy system is set to drive a huge increase in the requirements for critical minerals.
Lithium, nickel, cobalt, manganese and graphite are crucial to battery performance, longevity and energy density. REEs are essential for permanent magnets that are vital for wind turbines and EV motors. Electricity networks need a huge amount of copper and aluminium, with copper being a cornerstone for all electricity-related technologies.
In order to ensure the mineral security of the nation and to attain self-reliance in the area of critical and strategic minerals, the mines ministry created a joint venture company, namely Khanij Bidesh India Ltd (KABIL), with participating interests of NALCO, HCL and MECL.
KABIL is mandated to identify and acquire overseas mineral assets of critical and strategic nature, such as lithium and cobalt, among others.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
