Economy
PLI scheme eyed for critical minerals
Summary
- The mines ministry has prepared the policy draft after finalizing a list of 30 critical minerals that are required in a number key sectors
With an eye on China, the union government is likely to come up with a policy framework for critical mineral refining. Under the policy, the government may come up with an incentive scheme on the lines of the production linked incentive (PLI) scheme, said two people in the know of the development.
The mines ministry has prepared the policy draft in June after finalizing a list of 30 critical minerals that are required in a number key sectors including battery storage, telecom, defence among others.
“The policy framework for critical mineral refining would be aimed at boosting the segment through incentives. It is also likely to support recycling of minerals and may propose rationalization of GST. A draft of the policy has already been prepared," said one of the persons cited above.
Queries sent to the union ministry of mines remained unanswered till press time.
The Niti Aayog in a presentation on ‘critical minerals supply chain for domestic value addition in lithium-ion battery manufacturing’ in June 2023 had suggested incentives for setting up mineral processing and refining projects, especially for lithium carbonate, nickel sulfate, cobalt sulfate and spherical graphite.
The 30 minerals critical to the Indian economy are: Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, PGE, Phosphorous, Potash, REE (rare earth elements), Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium and Cadmium.
The report noted that though a greater thrust through legislative reforms in the recent years has been given to boosting mineral exploration, mining and advanced manufacturing, “the most vital—intermediate processing—has not got due attention".
“There is a need to scale-up support through funding mechanisms to de-risk innovations through research, piloting and deployment to advance sustainable technologies and processes towards commercialization in identified priority value chains," it said.
The emphasis on the domestic critical mineral ecosystem comes in the backdrop of the growing focus on energy transition as a large number of these minerals are used in renewable energy projects and batteries for both utility scale power storage and electric vehicles (EVs). These critical minerals are largely imported, with no significant domestic availability.
Nitin Gupta, chief executive officer and co-founder, Attero Recycling: “Critical minerals are required in EVs, energy storage systems along with several other kinds of other energy requirements. Currently all these critical minerals and metals are imported by India and most of it comes from China. There is a significant need for a policy framework and financial incentive is very much needed."
Observing that India can become a critical mineral refining hub, even if not a major producer, Rajat Verma, founder & CEO of LOHUM Cleantech said: “India should import to export. What we have done in crude...we import crude oil, but we are also a big exporter for refined petroleum products. In the very manner we have been able to develop state-of the art refining capacity in the country, similarly we should have state of the art refining capacity in these minerals."
Currently, the majority of the global refining capacity is based out of China, he added.
The Niti Aayog presentation in June last year had said that by localizing the mining and refining value chain of critical minerals, India can reduce its reliance on imports and help build resilience in global supply chains.
It also suggested national stockpiling of refined mineral precursors used in lithium-ion battery (LIB) electrodes, incentives for critical battery mineral exploration, mining and extraction through appropriate royalty and tax regimes.
