Critical Minerals for India's Clean Energy Transition

This Working Paper is part of WRI India's Energy Program. Reach out to Shivani Shah for more information.

The "critical" in "critical minerals" is the result of a range of economic, social, and technical factors that limit their supply relative to their growing demand. The methods to assess the criticality of minerals rely on their economic importance and the supply-side vulnerabilities that could lead to market tightness and greater volatility in prices.

• The vulnerabilities in mineral supplies have thus far been focused on factors such as the concentration of production of critical minerals in certain regions, long lead times for project development to reach the production stage, and the quality of resources available. The current literature that defines mineral criticality and vulnerability of supplies is based largely on the perspectives of developed countries. However, the emerging literature that analyzes mineral criticality is based on the needs of developing countries. The vulnerabilities related to critical minerals, which are not restricted to developing countries, include import reliance, governance indicators, policy-regulatory structures, the social costs of mineral extraction, threats of deforestation, loss of biodiversity, and environmental pollution.
• India's net zero transition goals are expected to result in significant CET requirements, which would increase the demand for EV batteries and BESS. The energy transition relies heavily on both EV batteries and BESS, which are highly mineral intensive and generate the primary demand for certain minerals.
• India's critical mineral vulnerabilities can be categorized under the broad pillars of security, resilience, and sustainable supplies. Supply insecurity stems from a domestic scarcity of minerals, coupled with extreme import dependence on some countries for processed minerals, producing a multiplier effect on the volatility of the prices of CETs.