America's multi-billion dollar investment aimed at securing vital minerals from India
India, driven by its expanding electric vehicle (EV) and battery manufacturing industries, has become fully reliant on imports for critical minerals such as lithium, cobalt, nickel, and graphite since 2020. The primary exporters of these minerals to India are countries like Australia, Chile, the Democratic Republic of Congo (DRC), Indonesia, and China.
To address this dependency, the Indian government has launched the "National Critical Mineral Mission" with an investment of 343 billion Indian rupees (US$3.94 billion). The mission aims to boost local production, recycling, and imports of critical minerals.
One of the targets set by the government is to ensure that 20% of all new batteries are made from recycled materials by 2030. However, the nascent recycling industry in India may struggle to keep up with this ambitious goal. The focus on recycling is a key part of India's strategy to boost domestic production and reduce import reliance for critical minerals.
India's EV goal could generate significant battery demand. With the aim of making 30% of its vehicles electric by 2030, India is currently represented by only 1% of total vehicle sales in India as of November 2023. The demand for copper and nickel in India is expected to grow rapidly due to its green energy goals.
The government has simplified laws to boost critical mineral exploration, allowing private firms to participate. India has identified significant reserves of copper and graphite, with 164 million tonnes of copper and 210 million tonnes of graphite to be explored. However, India continues to import lithium, cobalt, nickel, graphite, and other critical minerals.
India imported 100% of the lithium, cobalt, and nickel it used in 2020, and 60% of the graphite it utilized that year. China was the biggest exporter of critical minerals to India in 2024.
The World Resources Institute predicts that India would need to increase its lithium battery recycling capacity 60-fold to keep up with the battery demand generated by its 2030 electric vehicle goal. India plans to recover 90% of all battery materials from EVs by 2027.
However, the Indian government has not yet announced any specific policies or investments to support the expansion of the recycling industry for critical minerals beyond batteries. The demand for a robust recycling industry is crucial to India's goal of reducing its import reliance and becoming self-sufficient in critical minerals.
Many cancellations of mineral auctions occurred last year due to unclear data, inadequate capacity from Indian firms, and limited technology. The government's efforts to boost domestic production and recycling of critical minerals will be crucial in overcoming these challenges.
In conclusion, India's push towards electric vehicles and critical mineral self-sufficiency is a significant step towards a greener and more sustainable future. The challenges ahead are substantial, but with the right policies, investments, and technological advancements, India can reduce its import reliance and become a leader in the global EV market.
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