Opinion At the Critical Minerals Ministerial, India should list four priorities

Lately, India has signed several cooperation agreements, both bilaterally and plurilaterally, including MoUs with resource-rich countries like the Democratic Republic of Congo and Argentina, as well as agreements with countries such as Australia and Japan that have technological expertise. India and the US are part of the Mineral Security Partnership (MSP), the Quad and the recently announced Pax Silica. Bilaterally, India and the US have also launched the TRUST Initiative (previously iCET) and the Strategic Mineral Recovery Initiative. However, many of these partnerships remain framework-oriented and have yet to translate into assured mineral flows, technology transfers or extensive processing and downstream manufacturing capacity building.

The ministerial, thus, offers a timely opportunity for New Delhi to press for tangible outcomes that go beyond mere statements of intent. This must be anchored in at least four pillars.

First, China’s dominance in rare earths is rooted in subsidy-linked overcapacity that has driven out efficient producers elsewhere. Establishing alternative mine-to-magnet supply chains would require partner countries to combat this artificial price suppression with long-term offtake guarantees and coordinated price-risk mechanisms.

Second, critical minerals are not all critical in the same way, and many demand different approaches to ensure supply resilience. Rare earth elements, vanadium and antimony, for instance, are used in small quantities and for highly specialised applications. Their low demand, combined with high criticality use cases, makes China’s dominance an effective leverage in the short term. Export controls on these items disproportionately hurt other countries more than they hurt China itself.

Partner countries should work towards jointly stockpiling these minerals. Minerals with a wide range of commercial applications that are required in larger quantities, such as magnesium and copper, face a lower likelihood of China’s export restrictions. Even so, their steady supply from diversified sources remains crucial to offset any short-term shocks from China. The ministerial should work to redraw the global supply chains for such minerals.

Third, while India’s leverage lies in its large and lucrative market and being the storehouse of the world’s largest reserves of monazite, it risks being pigeonholed as a consumer of final goods or as an exporter of unprocessed ore. For instance, India exports manganese ore in its raw form, the value of which would increase by three to 10 times if it could refine it domestically to produce ferromanganese or manganese steel. India must push for joint long-term research collaborations, processing partnerships, as well as capacity building and scale-up, so as to create this value within its borders.

Similarly, breaking China’s chokehold would require investments in substitutes, such as using iron or manganese in place of cobalt for batteries, along with innovations and design improvements that make magnets less dependent on rare earths. While the MSP and TRUST emphasise a focus on R&D and tech sharing, these must be further strengthened.

Additionally, critical minerals are not the same as oil in that they can be recovered from their source and reused. Recycling is often an underappreciated facet of mineral security, even though it offers a way to bypass China’s overbearing processing capabilities. In fact, the world may be reaching a tipping point after decades of consistent mining have sharply decreased ore grades and quality. In Chile, the world’s largest producer of copper, mining waste has higher-grade copper than primary production sites.

However, as seen in the case of lithium over the past few years, unusually low prices of Chinese primary production can disincentivise recycling. Less than 3 per cent of lithium’s global demand currently comes from recycling. Procurement policies with guaranteed price floors between partner countries would be essential to tackle this. India has the potential, even as a late entrant, to be a hub for recycling and must position itself as such.

Finally, even as India has signed several agreements with resource-rich countries, Indian firms are constrained by limited financial resources and technological expertise to be globally competitive. International partnerships may help Indian firms with access to deeper capital pools. The MSP, for instance, helps streamline due diligence efforts and identify projects for co-investment. At least one Indian project — a lithium refining capacity in Brazil — is currently funded by this, but Indian firms may be hesitant to expand in politically unstable regions. India must negotiate for blended-finance mechanisms that offer a political backstop and safety net for such endeavours through joint risk-sharing.

The writer is a researcher in technology geopolitics at the Takshashila Institution, Bangalore. Views are personal