To improve national security, the government must develop mining

The National Mineral Policy of 2019 recognises that minerals are essential for industry and employment and have export potential.

mining, mining sector, mining industry
After the Second World War, the US created a strategic mineral stockpile by law, and this is managed by the Defence Logistics Agency.

By Ranjan Mathai

The recently announced National Mineral Policy 2019, covering non-fuel and non-coal minerals, brings back into focus the crucial significance of vital raw materials for India’s economy which is set to become the third-largest in the world over the decade ahead. India has a great historical legacy in mining and metallurgy, which enabled the development of advanced material civilisations on our soil from ancient times. Yet, mining and minerals have rarely been given an appropriate importance by policymakers or in the public imagination. If anything, mining has come to be associated with damage to the environment and tribal habitats, and unfair acquisition of natural resources. The release of the NMP 2019 is an opportunity to bring back a balance between such concerns and the undeniable need for minerals to sustain daily life in our modern economy. We have reached dangerously high levels of import dependency while less than 10% of India’s potential has been explored. It is also time to understand the implications for national security of access to critical minerals.

The NMP 2019 recognises that minerals are essential for industry and employment and have export potential. Actually, the growth and diversification of our economy, combined with restrictions on domestic mining, have led to a surge in imports of minerals and metals—reaching over $130 billion in the last year, contributing significantly to the current account deficit. A rational approach to sustainable mining at home will release resources for other essential imports.

A well-developed, sustainable mining industry has immense scope for employment generation and the NMP rightly targets human resource development for the sector, as well as robotics and automation to assist in deep underground mining. Given the spread and diversity of India’s geological potential, mining can create new centres of economic activity in various parts of the country, including some which face internal security threats. Mining contributes just over 2% of our GDP as against 5% in China and 7-8% in Australia and South Africa, with whom we share geological characteristics.

Minerals are required not just for the traditional manufacturing industries of our present (including defence industries that require large quantities of copper, aluminium, titanium, bismuth, etc) but are inextricably linked to our future hi-tech, digital economy and renewable energy sources. Our ubiquitous mobile phones require cobalt, graphite and aluminium as well as lithium. It is estimated that 62 elements are used in making high speed, high capacity, integrated circuits. The French expert Guillaume Pitron has written that the electric transport of the future will give up oil, but will be “dependent on some 30 rare metals which have outstanding electronic, optical or magnetic properties”. Vehicle batteries may require 10kg of cobalt. Permanent magnets used in electronics and “smart” missiles consume up to 3.5kg of rare earth metals like samarium, and lasers use neodymium and other rare metals.

The “green tech“ demand of tomorrow will require more exploration, mining and refining of rare earths. Currently, China controls over 90% of global rare earth supplies. It can, and has used this leverage to cut off supplies to customers abroad for geopolitical reasons; and it may do so again to keep its lead in the new technologies underpinning its Made in China 2025 vision.

NMP 2019 specifies that research will be directed towards the raw materials required for production of materials of high purity for use in advanced technology applications. We have to tap our substantial potential for mineral resources which will ensure we have the wherewithal to join in advanced manufacturing for the digital age, including hi-tech defence industries.

The NMP gives long overdue recognition to mineral security as an important issue with strategic as well as economic significance, and seeks long-term mineral security for the nation through enhanced exploration and development at home and acquisition of assets abroad. China has had a strategy on critical minerals since 2003. It has very little cobalt, but has moved fast in Africa, acquiring companies in the Democratic Republic of Congo which produce about 30% of the world’s cobalt production!

After the Second World War, the US created a strategic mineral stockpile by law, and this is managed by the Defence Logistics Agency. Analysts suggest that the stockpile, which once held 3 years supply of as many as 75 minerals, began to decline after the Cold War ended, reaching just 18 minerals with a value of $1 bn in 2016. President Trump has, however, identified the reliance on imports of minerals as a vulnerability, and enunciated a new strategy to ensure secure and reliable supplies of critical minerals. (Industry experts have identified China, Russia, South Africa and some other developing countries as being the key sources of many of the 50 minerals for which the US’s import dependence exceeds 50%) . The US president’s executive order of December 2017 defined a “critical” mineral as one that i) is essential to the economic or national security of the US; ii) has a supply chain which is vulnerable to disruption; and iii) serves an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economy or national security.

Focusing on security and prosperity, the US policy directive declares “an increase in private sector domestic exploration, production, recycling, and reprocessing of critical minerals, and support for efforts to identify more commonly available technological alternatives to these minerals will reduce our dependence on imports, preserve our leadership in technological innovation, support job creation, improve national security and the balance of trade, and enhance the technological superiority and readiness of our Armed Forces which are among the nation’s most significant consumers of critical minerals”. NMP 2019 should bring to bear a similar holistic vision for India’s national security.

Former Indian foreign secretary and Indian High Commissioner to the UK.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

Most Read In Opinion