Africa can make India’s ‘critical mineral mission’ shine

Last Updated07/09/2024

In the Union Budget 2024-25, Finance Minister Nirmala Sitharaman introduced the Critical Mineral Mission, a forward-looking initiative aimed at securing the essential minerals needed to drive India’s clean energy ambitions.
The mission's objectives are clear: expand domestic production, prioritise recycling, and incentivise overseas acquisitions of critical mineral assets.

India has made key strides towards expanding its domestic mineral exploration. The Mines and Minerals (Development and Regulation) Amendment Bill, 2023, opened up private sector participation by removing six minerals from the atomic list, thus broadening the scope for domestic exploration.
The private sector is now being encouraged to explore these minerals, which are crucial for high-tech industries like battery manufacturing and renewable energy technologies.
However, India’s exploration and processing capacity remains in its infancy. The country still lacks the manufacturing capabilities for end-use components, and upskilling the labour force, particularly in battery manufacturing, remains an urgent necessity.

To meet its growing mineral needs, India is increasingly turning to overseas acquisitions, with a focus on countries rich in critical minerals. The formation of Khanij Bidesh India Limited (KABIL) in 2019 exemplifies this strategy.
The joint venture, which includes three public sector undertakings, signed a major agreement for lithium mining in Argentina, marking a significant step in securing the minerals crucial for battery production.
A key region for India’s mineral acquisition efforts is Africa, home to 30% of the world’s known critical mineral reserves. India shares deep political, economic, and historical ties with the continent, which it is looking to leverage.
Africa already plays a crucial role in India’s energy security, supplying 15% of India’s oil demand and significant amounts of natural gas and minerals. As African countries diversify their economies away from raw mineral exports, opportunities for collaboration on value-added industries are emerging.
India has already initiated mining and infrastructure projects in countries like Zambia and Zimbabwe and has signed agreements for geological mapping, mineral deposit modelling, and workforce capacity building. These efforts will enhance India’s role in Africa’s industrialisation and help build resilient supply chains.

India’s race for critical minerals takes place in the shadow of China’s dominant presence in the sector. Beijing has long-standing investments in Africa, especially in cobalt mining in the Democratic Republic of Congo.
Its control over processing and manufacturing capabilities poses both economic and security risks to India. While India aims to secure mineral assets, it must do so in a geopolitically competitive landscape, where China has already established strong partnerships.

Despite these challenges, India has some unique advantages. Indian construction companies have a strong track record of building mining-adjacent infrastructure across Africa, including transmission lines, hospitals, and railways.
India's technology start-ups are also playing an increasingly important role in the mining sector, offering tools for exploration, extraction, and ecological sustainability.
Moreover, initiatives like the Indian Technical and Economic Cooperation (ITEC), which has trained 40,000 Africans in various sectors, could be pivotal in developing the critical mineral workforce needed for India’s long-term goals.