Critical Minerals: The Foundation of Strategic Power

PRERNA FOR IAS

         Mehnat Aapki, Guidance Humari

         Roz ki Prelims Practice — Experts ke Saath

Critical Minerals: The Foundation of Strategic Power

(Based on Article in Hindu dated 4th August 2026 by Mr. VINAYAK VIPUL)

History and Background

Critical minerals have become the backbone of the global clean energy transition and advanced manufacturing. Minerals such as lithium, cobalt, nickel, graphite, copper and rare earth elements (REEs) are indispensable for electric vehicles (EVs), batteries, semiconductors, renewable energy systems, defence equipment and digital technologies. Earlier viewed merely as industrial raw materials, they are now considered strategic assets influencing national security and geopolitical power. As countries pursue decarbonisation and technological leadership, mineral security has become as important as energy security.

Present Demand and Supply

Global demand for critical minerals has risen sharply due to rapid growth in EVs, solar energy, wind power, AI hardware and defence manufacturing. However, the global supply chain remains highly concentrated. China dominates the processing and refining of most critical minerals, accounting for nearly 90% of rare earth processing, around 75% of cobalt processing, and 70% of lithium chemical processing. India possesses reserves of copper, graphite, nickel, cobalt and rare earth-bearing minerals, but domestic mining, processing and refining capacities remain inadequate. Consequently, India continues to depend heavily on imports of lithium, cobalt, nickel and processed rare earth products.

Future Demand

According to the International Energy Agency (IEA), demand for transition minerals is expected to grow several times by 2040–2050 as countries expand clean energy infrastructure. Copper demand will increase significantly due to power transmission and electrification, while lithium, nickel and graphite demand will surge because of battery manufacturing. Rare earth elements will witness strong demand for permanent magnets used in EVs and wind turbines.

Global Scenario

Major economies are rapidly securing mineral supply chains. The European Union's Critical Raw Materials Act, the United States' Inflation Reduction Act, Japan's overseas mineral investments, and Australia's mining partnerships aim to reduce dependence on single suppliers. Countries are also promoting recycling, strategic stockpiles and international partnerships to strengthen supply security.

India's Import Substitution Strategy

India has identified 30 critical minerals and launched the National Critical Mineral Mission to strengthen exploration, mining and value addition. The Government aims to expand domestic exploration, encourage private participation, develop refining and processing facilities, establish strategic reserves, and secure overseas mineral assets through KABIL (Khanij Bidesh India Limited). Initiatives such as the India–US Critical Minerals Partnership, rare earth corridors, battery manufacturing under PLI schemes, and increased investment in mineral recycling will reduce import dependence. Building an integrated mining-to-manufacturing ecosystem will be crucial for achieving Atmanirbhar Bharat, ensuring supply security, and supporting India's energy transition, semiconductor industry, defence manufacturing and long-term economic growth.