News
12/05/26
India's critical minerals push faces funding gap: IEEFA
Mumbai, 12 May (Argus) — India's plan to build a domestic critical minerals
supply chain risks being slowed by financing bottlenecks, policy execution
delays and continued dependence on imported raw materials, according to a report
released today by think-tank the Institute for Energy Economics and Financial
Analysis (IEEFA). India imports 100pc of the lithium, cobalt and nickel used in
clean energy manufacturing, with demand expected to rise as the country targets
30pc electric vehicle penetration by 2030 and raise installed solar capacity to
230GW and wind capacity to 140GW, the report said. Investment appetite remains
weak because critical minerals projects involve high upfront costs, volatile
prices and long development timelines. Mining projects can take 10-15 years to
move from exploration to commercial production, creating prolonged periods of
uncertainty for investors. India launched its National Critical Mineral Mission
(NCMM) in January 2025 with an outlay of 343bn rupees ($3.7bn) over seven years,
targeting 1,200 exploration projects and auctioning more than 100 critical
mineral blocks by 2030-31. But the programme focuses largely on regulatory
support and lacks direct capital expenditure backing for large-scale mining,
refining and processing projects, IEEFA said. India has also widened its
critical minerals focus beyond energy transition materials. In January, the
government classified coking coal as a critical and strategic mineral as part of
efforts to reduce import dependence and support steel sector expansion. India
aims to raise crude steel production capacity to 300mn t/yr by 2030 and 500mn
t/yr by 2047, while the coal ministry's ‘Mission Coking Coal' targets domestic
output of 140mn t/yr by 2030 from 66.49mn t/yr in fiscal year 2025-26,
provisional data from the ministry show. The scale of these targets is likely to
require significant long-term funding across mining, processing and related
infrastructure. India identified 5.9mn t of inferred lithium resources in Jammu
and Kashmir as of 2023, data from the Ministry of Mines show. The country also
holds 13.15mn t of monazite deposits, containing an estimated 7.23mn t of rare
earth oxides. In February, the Geological Survey of India identified 482.6mn t
of rare earth ore resources through exploration projects. The report also stated
that India's midstream refining sector faces pressure from Chinese overcapacity,
which continues to suppress margins globally. China accounts for around 60-70pc
of global refining and processing capacity for key minerals such as lithium,
nickel and cobalt, and about 90pc of rare earth refining. China also controls
about 51.7pc of global rare earth reserves, according to the report. The
International Energy Agency estimates that global mining and refining would need
$915bn in fresh investment between 2026-35 under its Announced Pledges Scenario,
it stated in a report in October last year, highlighting the scale of additional
investment needed to meet projected demand. India is also pursuing bilateral
partnerships with Australia, Argentina, Peru, Chile, Zimbabwe, Mozambique,
Malawi and Côte d'Ivoire to secure access to critical minerals, while
state-backed Khanij Bidesh India is seeking overseas lithium and cobalt assets.
By Keertiman Upadhyay and Romil Sethi Send comments and request more information
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