China's Export Control on Critical Minerals
Recently, Ministry of Commerce in China added 28 U.S. entities to its export control list, focusing on dual-use items including minerals crucial for high-tech applications such as aerospace and electronics.
Minerals Affected
- Tungsten
- Gallium
- Magnesium
- Beryllium
- Hafnium
- Lithium-6
This move is strategic, targeting minerals critical to Western nations while avoiding any actions that might disrupt China’s industries or export-dependent sectors.
International Implications
The restrictions highlight the increasing importance of critical minerals in global economic diplomacy, prompting nations like India to bolster their domestic mineral production capabilities.
India's Challenges with Domestic Mineral Production
Recent Developments
Despite discovering lithium deposits in Jammu and Kashmir, the interest from companies in bidding for these resources is low.
- Only 48% of mineral blocks have been auctioned recently.
Government Initiatives
- Identification of 30 critical minerals by the Ministry of Mines.
- Formation of Khanij Bidesh India Ltd. (KABIL) for overseas investments in minerals like lithium and cobalt.
- Amendments in 2023 to the Mines and Minerals Act aimed at encouraging private sector investment.
Exploration License Introduction
This license allows specialized exploration without the need for a full-scale mining operation, with a reimbursement promise of 50% exploration expenses post-mining commencement.
Barriers and Recommendations
- Outdated resource classification systems deter miners due to unclear commercial viability.
- Low demand for exploration licenses due to inadequate geological data.
To mitigate these issues, offering larger upfront fiscal incentives during exploration is suggested, similar to India's approach in semiconductor manufacturing, which could offset initial costs and boost downstream mining activities.
