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India's critical minerals push faces funding gap: IEEFA

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 at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.