K Srinivasan
THE US, Australia, Japan and India – known as the Quad ( Quadrilateral Security Dialogue grouping) – have finally woken up to the arm-twisting or rare minerals blackmail by China and agreed to collaborate on both securing and diversifying critical rare mineral supply chains. This was one of the key outcomes of the meeting of the Quad Foreign Ministers in Washington. Called the Quad Critical Minerals Initiative, it is a reflection of how all four countries and countless others have become increasingly queasy about any one country holding a veto on how, when and who they will provide these rare minerals to. The consequence of such strong-arm tactics has seen the Quad issue a stinging statement: “Reliance on any one country for processing and refining critical minerals and derivative goods production exposes our industries to economic coercion, price manipulation, and supply chain disruptions, which further harms our economic and national security.”
Several roadblocks
India can give the Chinese a run for their money, considering we are sitting on some deposits of rare earth minerals. But there are many roadblocks. As the Financial Express recently reported, “Despite holding some of the world’s largest reserves of rare earth elements (REEs), India’s chances of tapping their full potential remain remote. Deep-rooted concerns over radioactive contamination and national security are prompting the Government to retain tight control over mining operations, significantly limiting the private sector’s role in developing this strategically vital resource.” The FE report added, “According to analysts, this cautious approach stands in stark contrast to the urgency of the current global rare earth supply crunch. China, which controls over 60 per cent of global REE mining and nearly 90 per cent of refining, has introduced new export licensing norms that have tightened global availability.” In fact, when the Mines & Minerals (Development & Regulation) Act of 1957 was amended in 2023 to allow private sector participation in exploring 29 critical minerals, there was considerable euphoria that finally good sense had prevailed, and a key area was being opened to the private sector.
Transparency, efficiency
What the fresh amendment promised was that the private sector would get along with each licence exploratory opportunity for an area as vast as 1,000 square kilometres. At the time of the first auction, G Kishan Reddy, the Union Minister for Coal and Mines, said, “This new framework will encourage transparency, efficiency, and innovation, ensuring that only the most promising areas remain for detailed exploration.” Also, the Government agreed to reimburse 50 per cent of the exploration costs for any areas where minerals are not discovered during the exploration phase to encourage private companies to invest in the project.
So why has the ambitious roadmap not met with the desired success at the ground level? As the FE explained, “rare earth elements, particularly those used in high-performance magnets for electric vehicles, wind turbines, and defence equipment, are often found mixed with radioactive materials like uranium and thorium.
This association has made the mining and handling of these minerals a sensitive matter. In a recent high-level meeting involving the Department of Atomic Energy (DAE), Niti Aayog, the Ministry of Mines, and the Ministry of Heavy Industries, officials reaffirmed that the extraction of REEs linked to radioactive substances would continue under Government supervision. The Government’s position is backed by legislation. The 2023 amendment to the Mines and Minerals (Development and Regulation) Act specifies in Part D of its first schedule that private players can only mine REE deposits free from uranium and thorium. ‘The mining of REE minerals containing radioactive content is best handled by state-owned agencies to mitigate risks and ensure national security’, said an official familiar with the deliberations.”
Extremely myopic
This is an extremely myopic view. If the private sector can participate in defence production, telecom and aviation, which are critical to national security, how will they be lax and less responsible when involved in mining? On the face value, it seems like one more effort to ring fence territorial rights. A good policy is only as good as its implementation. One hopes the Quad’s quest for alternative sources of rare minerals will be a wake-up call for the Government to review why its ambitious roadmap for this sector is gasping and stuttering to get going.
