NEW DELHI: In the worldwide scramble for critical minerals, the government will look at more collaborations through expansion of free trade agreements and special partnership agreements to meet its requirements of these resources, the bedrock of modern manufacturing.
“The government shall aim to enter into Critical Minerals Partnership Agreements (CMPA) with resource-rich countries. The government will also work to include critical minerals chapters in existing bilateral or Free Trade agreements with countries of interest,” according to the National Critical Minerals Mission (NCMM) notified late Friday.
Targets for partnerships could be producer countries like Australia, Chile, Peru, Argentina and Canada. A trade agreement with Australia is already in place and is being expanded. FTA talks with Canada, Peru and Chile are in progress. With Australia and Argentina, Khanij Bidesh India Ltd (KABIL) has already entered partnerships for exploration.
The mission was announced in the 2024 general Budget and got cabinet approval in January 2025. The mission will see spending of Rs 16,300 by the government and Rs 18,000 by state run companies till 2030-31. The notification comes amidst rising demand for these minerals and use of the dominance in the sector by China to dictate trade terms to an economy like the US. The recent supply shock by China has further pushed the countries to see self-reliance in the sector, While India does have reserves of some critical minerals like silicon and graphite, for others it will have to keep relying on imports.
The Mission will extend support for mapping and detailed exploration of critical mineral assets in resource-rich countries through the Geological Survey of India (GSI) or other Indian state-run private entities for supplying minerals to India. Indian entities shall be encouraged to collaborate with partners in international exploration and acquisition projects and Rs 1600 crore will be allocated for it till 2030-31.
To acquire overseas critical mineral assets the mission will also support the private sector. Even joint ventures between state-run companies and the private sector will be encouraged. The mission expects investments RS 2500 crore by Indian companies every year to acquire critical mineral assets or Rs 18,000 crore by 2030-31. For mining and evacuation of the critical minerals abroad, another subsidy of Rs 4,000 crore has been built into the mission.
To build domestic critical minerals processing capabilities the government will create mineral processing parks to house mineral processing industries and a scheme for it will be prepared by the Ministry of Mines in consultation with the Ministry of Finance. Government allocation for the parks will be around Rs 500 crore. “Efforts will be made to utilise existing industrial parks if available,” the mission document said.
To facilitate the financial ecosystem for the critical minerals in India, the Mission will make efforts to develop and implement a range of fiscal measures like tax credits and soft loans designed to incentivise junior exploration and mining companies. Additionally, mechanisms to encourage investments in critical mineral exploration and mining with the aim to lower the risk for investors while ensuring that companies have the essential capital needed will be developed.
For incentivising recycling of the minerals the mission talks of Rs 1,500 crore scheme. To encourage the growth of the recycling industry and attract more companies to engage in processing and value addition for the domestic sector, import duties and other barriers on recyclable materials such as scrap, black mass, and e-waste shall be revisited, the mission said.
To develop the National Critical Minerals Stockpile/Reserves, the government will allocate Rs 500 Crores during the Mission period till 2030-31.
The NCMM says that government agencies shall undertake 1200 exploration projects between 2024-2025 to 2030-2031 and to scale up mining activities more than 100 blocks of critical minerals resources will be auctioned by 2030-2031. For exploration around RS 7,000 crore will be spent.
Source: The Financial Express
