In a strategic response to the ongoing global technology war and fierce competition over securing raw material crucial for the sector, the Union Cabinet on Wednesday approved the launch of the National Critical Mineral Mission (NCMM) with an expenditure of Rs 16,300 crore and expected investment of Rs 18,000 crore by public sector undertaking (PSUs) and private sector players.
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Hailing the decision, Prime Minister Narendra Modi said the creation of NCMM was “a major step towards self-reliance in critical minerals!”
The initiative aims to enhance self-reliance in critical minerals crucial for high-tech industries such as semiconductors, clean energy, defense, and even Artificial Intelligence.
The NCMM is designed to address the entire value chain of critical minerals, which include essential resources like lithium, cobalt, nickel, and rare earth elements.
The mission’s objectives include:
- Intensifying exploration: The mission will promote extensive exploration of critical minerals both onshore and offshore.
- Fast-track approvals: A streamlined regulatory process will be established to expedite approvals for mining projects related to critical minerals.
- Financial incentives: The initiative will provide financial support for exploration activities and encourage the recovery of minerals from waste materials.
- Stockpiling resources: Plans are in place to develop a strategic stockpile of critical minerals within India to ensure a stable supply chain.
The NCMM is part of India’s broader Atmanirbhar Bharat initiative.
Recognising that dependence on imports for these critical resources poses a risk to national security and economic stability, the Centre has made recent amendments to the Mines and Minerals (Development and Regulation) Act, which have facilitated increased exploration and mining activities. Notably, the Geological Survey of India has initiated numerous exploration projects aimed at identifying new mineral deposits.
The NCMM encourages collaboration between public sector enterprises and private companies to acquire critical mineral assets globally. This strategy aims to enhance trade relations with resource-rich nations while simultaneously boosting domestic production capabilities.
Additionally, the establishment of mineral processing parks and research centers dedicated to critical mineral technologies is proposed to foster innovation in this sector.
Recent government actions include the elimination of customs duties on most critical minerals as part of the Union Budget for 2024-25. This move is expected to facilitate greater availability of these resources in India and incentivise industries to establish processing facilities domestically.
Furthermore, the auctioning of strategic mineral blocks has commenced, with significant participation from industry stakeholders indicating a robust interest in developing India’s mining sector.
AI and semiconductors
Securing a supply chain for critical minerals is pivotal for India as it navigates the ongoing semiconductor and AI competition on the global stage.
Critical minerals such as gallium and germanium are vital for semiconductor manufacturing.
These materials are used in various electronic components, including transistors and diodes, which are foundational to modern computing and AI technologies.
By developing a robust domestic supply of these minerals, India will be able to reduce its reliance on imports, particularly from China, which currently dominates the supply chain for many critical minerals. This move not only enhances national security but also stabilises production costs for semiconductor manufacturers.
The growth of AI technologies is also heavily dependent on advanced semiconductor capabilities.
With a secure supply chain of critical minerals, India will be able to enhance its semiconductor manufacturing capabilities, which in turn supports the development of AI hardware and software solutions.