On 23 December, the Mines Secretary VL Kantha Rao, announced India’s plans to launch the Critical Mineral Mission (CMM) in 2025, bringing together multiple ministries, industries, scientists and academia in a coordinated effort to secure minerals, with ever-growing applications.
The mandate of the CMM, first proposed during Finance Minister Sitharaman’s Union Budget 2024-2025 speech, would include domestic production, recycling, and overseas acquisition of critical minerals, besides technology development, a skilled workforce, extended producer responsibility framework, and a financing mechanism.
CMM’s directives are reflective of India’s aspirations of securing domestic supply chains to mitigate strategic vulnerabilities, while also leveraging foreign reserves, technology and capital vis-à-vis trusted bilateral and multilateral partnerships.
While resource-rich countries like Argentina, and Australia, among others have often been discussed vis-a-vis India’s critical mineral diplomacy, one country albeit not minerals lushed, yet potentially key to India’s CMM is the US- largely missing from the discourse. Notwithstanding President Trump’s recent executive order beginning the withdrawal process of Washington from the Paris Accords, three fundamental convergences steer India-US critical minerals cooperation.
Firstly, there are 26 common designated critical minerals shared by both partners, which is the greatest commonality, India has with any of the countries with a critical minerals strategy.
Secondly, bilateral cooperation in critical minerals is key for not only attaining targets of the Paris Accords, but also landmark bilateral clean energy agreements, including India-US Climate and Clean Energy Agenda 2030 Partnership, and Initiative to Build Safe and Secure Global Clean Energy Supply Chains. These agreements require several common designated minerals (antimony, lithium, tellurium, etc) for targeted manufacturing of various renewable energy components, besides electric vehicle (EV) and energy storage batteries.
Thirdly both sides, besides being over-reliant on imports from China have been subject to the latter’s economic coercion i.e., export restrictions on Washington for key dual-use critical minerals, and blocking India’s access to solar equipment.
Even as China tests the policy mettle of India and the US, Delhi’s aspirations for a global manufacturing hub have aligned with Washington’s ‘friend-shoring’ strategies, translating into bilateral initiatives on building critical minerals supply chains.
Initiatives
The two sides have announced measures both at bilateral and multilateral levels. Under the Initiative on Critical and Emerging Technology (iCET), the two have planned to strengthen industrial and commercial coordination for critical mineral supply chains through the India-US Commercial Dialogue and India-US CEO Forum, including collaboration in Neodymium-iron-boron metal, alloy and magnet-making technologies.
Delhi and Washington have committed over $1 million in support for India-U.S. advanced materials R&D forum, to expand collaboration between scientists and academia. The two also intend to advance research collaboration for beneficiation of critical minerals, including lithium, titanium, and gallium, and collaborate between India’s Geological Survey of India (GSI) and the US Geological Survey (USGS) on exploration, characterization and evaluation of critical minerals deposits.
While PM Modi’s U.S. visit in 2023 culminated in the announcement of India’s Epsilon Carbon Limited’s $650 million investment in a U.S. EV battery factory, Commerce Minister Piyush Goyal’s US visit in October 2024 concluded with new agreement, primarily involving battery mineral supply chains.
The pact’s prioritised areas include identifying equipment, services, and policies for mutually beneficial commercial development of entire critical minerals value chains from exploration to recovery. Moreover, to bolster its nascent EV industries, India is in talks with America for potential collaboration on lithium processing technology, seeking technical help for establishing a lithium refinery- required for battery manufacturing.
The Minerals Security Partnership (MSP), and Quad serve as key multilateral groupings pioneering efforts to diversify minerals supply chains. Under MSP (involving 14 countries, and the EU), Delhi and Washington’s mining firms are collaborating on two exploration projects- a lithium block in Argentina and a rare earths (RE) block in Malawi.
India has also joined the MSP induced Minerals Security Finance Network (MSFN), which through development finance institutions, export credit agencies and members fosters co-financing and information exchange. Meanwhile during the Quad’s Hiroshima Summit, members established the Quad Investors Network (QUIN), a network of private and public investors across members that support co-investment in critical and emerging technologies, including critical minerals sector.
Actualising collaboration
Indian Public Sector Undertakings (PSUs) have not fared well in exploring and mining deep-seated, and battery minerals, with merely an estimated 10% of India’s Geological Potential explored, and less than 2% mined. With an estimated reserves of 5.9 million tonnes (Mt) and 44.9 mt of lithium and cobalt respectively, pact on battery minerals could be operationalised, beginning with exploration and extraction.
Collaboration could involve joint feasibility studies by GSI and USGS in India’s battery mineral blocks to learn from the USGS’ best practices in geologic, geophysical and geochemical surveys, and mapping of mineral deposit database.
Moreover, Indian battery mineral private mining firms like Tata Group could consider joint ventures with American counterparts including Albermale and Jervois Global, gaining from their technical expertise, equipment and practices, which are more productive, sustainable and safer. However this would necessitate adjustments in domestic regulatory compliance to grant timely permits for mining leases, currently elusive and major impediment to sectoral foreign investment.
The scope for collaboration in overseas acquisition of minerals wherein both the countries are completely or largely imports dependent seems promising. India’s PSUs with international presence including Coal India or Khanij Bidesh India Ltd (KABIL) could partner with American counterparts for acquiring tantalum, and niobium mines in high concentration countries like Indonesia and Brazil.
Moreover, collaboration on RE’s including europium, gadolinium, and terbium in countries like Malaysia, having the third largest reserves of these RE’s could be rewarding. A trilateral investment partnership with Australia in Malaysia can be considered with Australian firm Lynas Rare Earths’ already operating the world’s largest RE extraction and processing plant in Kuantan.
Delhi has proposed an EV-based critical minerals partnership agreement (CMPA) which would give an free trade agreement (FTA)-like status, making India eligible for tax credit benefits under the US Inflation Reduction Act (IRA).
The tax credit depends on critical minerals’ origins, requiring a percentage of materials in EV batteries to come from the countries having FTA with Washington. Making Indian assets compliant with the IRA requirements thus remains necessary which needs an objective appraisal of labor and environmental standards.
While India has statutory safeguards, provided by the Mines and Minerals (Development and Regulation) (MMDR) Act, including the mandatory establishment of District Mineral Foundation (DMF) by State governments, implementation remains lax.
Proper enforcement of environmental regulations on mining companies remains essential to prevent prevalent unsafe mining practices, and top mining states should allocate adequate sums for environmental preservation and safe working conditions in DMF sanctions.
CMPA could pave the way for substantial FDI into India’s critical minerals sector. Washington’s Development Finance Corporation could play a key role in financing minerals projects separately.
Partnership along these lines could buttress shared strategic goals. Since no country can achieve mineral security fully, this warrants the collaboration of like-minded partners like India and the US, in turn contributing to resilient, sustainable and equitable global critical minerals supply chains.
Araudra Singh is a researcher at the Council for Strategic and Defense Research, New Delhi. He also serves as a non-resident Assistant Editor at Consortium of Indo-Pacific Researchers, New Jersey.