Budget 2024: What is India's Critical Minerals Mission
Finance Minister Nirmala Sitharaman announced a proposal for a critical minerals mission during her Union Budget speech today. The government plans to establish this mission for domestic exploration and recycling of minerals, as well as overseas acquisition of critical mineral assets. The mission's mandate will include technology upgrades, development of a skilled workforce, and an extended producer responsibility framework suitable for financing.
Initiative is in response to concerns raised in Economic Survey
Critical and rare earth minerals are vital for advancing clean energy technologies and electric mobility, as highlighted in the Economic Survey 2023-24. The survey emphasized that geographic concentration and trade restrictions significantly impact the use of renewables and India's electric vehicle ambitions. To improve its critical minerals supply chain, India has been actively seeking international partnerships. Collaborations with mineral-rich countries like Australia and participation in frameworks such as the Mineral Security Partnership (MSP) are part of this new mission.
Budget 2024: Incentives and exemptions for critical minerals
In her budget speech, Sitharaman announced a full exemption of customs duties on 25 critical minerals and a reduction in basic customs duty (BCD) on two others. She stated that this measure would boost the processing and refining of critical minerals and secure their availability for strategic sectors. The mining sector is hopeful that the budget will provide financial incentives for these essential minerals.
Offshore blocks auction and critical minerals' role
The finance minister also announced an auction for the first tranche of offshore blocks for mining. Lithium and other critical minerals are necessary to manufacture batteries, telecom and defense equipment, among other things. India aims to develop a manufacturing ecosystem for these products, requiring a robust raw-material supply chain. To enhance domestic mining, the government passed the Mines and Minerals (Development & Regulation) Amendment Bill in 2023. This bill allows it to award exploration licenses for deep-seated and critical minerals.
