On 4 November 2026 the Union Cabinet approved a Capex Support Scheme to Promote Critical Mineral Processing with an outlay of Rs 2,814 crore over FY 2026-27 to 2030-31. It will give a 30% capital subsidy to build four plants: two for lithium and two for nickel, with cobalt recovered as a by-product. The Cabinet's reasoning is the real lesson. Processing of critical minerals is concentrated in a few places, and India still imports most refined intermediates. Mining a mineral and processing it are different steps, and the second is where most of the power lies. This topic goes beyond India's general mineral belts and producer states to the minerals that run batteries, magnets and chips.
What Makes a Mineral "Critical"?
A mineral is critical when two things are true: the economy badly needs it, and its supply is risky, because few countries produce or refine it. It does not have to be rare. Copper and tin are common, yet both are on India's list because India imports much of its need and has no easy substitute. In 2023 the Ministry of Mines, following an expert committee's report, listed 30 critical minerals. The 2023 amendment to the MMDR Act (the mining law) also let the Centre auction blocks of such minerals and removed six minerals including lithium from the "atomic minerals" list, which had kept them out of private hands.
| Use | Minerals on India's list | Why they matter |
|---|---|---|
| Batteries and storage | Lithium, cobalt, nickel, graphite, vanadium | Cathodes and anodes of lithium-ion cells (see batteries and electrochemical cells) |
| Magnets and clean energy | Rare earth elements (REEs) | Strong magnets in EV motors, wind turbines, missiles and fighter jets |
| Electronics and chips | Gallium, germanium, indium, silicon, tellurium, selenium, tantalum | Semiconductors, solar cells, fibre optics, capacitors |
| Steel, alloys and defence | Tungsten, molybdenum, niobium, rhenium, hafnium, zirconium, titanium, beryllium, platinum group metals | Hard, heat-proof alloys for engines, armour and reactors |
| Other | Antimony, bismuth, cadmium, copper, phosphorus, potash, strontium, tin | Wiring, fertiliser, solders, ammunition and more |
"Rare earths" are not especially rare in the crust. The trouble is that workable deposits are few, and separating the 17 elements from each other is hard and polluting. A critical mineral is judged by supply risk plus economic importance, not by scarcity alone.
Where India's Critical Minerals Lie
India has a few important finds, many small ones and almost no refining. Learn these pairings.
| Mineral | Where in India | Notes |
|---|---|---|
| Lithium | Reasi, Jammu and Kashmir; Mandya, Karnataka | Reasi: 5.9 million tonnes, announced by the Geological Survey of India (GSI) in February 2023. Mandya: about 1,600 tonnes, found by the Atomic Minerals Directorate in 2021 |
| Rare earths (in monazite) | Beach sands of Kerala, Tamil Nadu, Odisha and Andhra Pradesh | Mined by IREL, a Department of Atomic Energy company |
| Nickel and cobalt | Sukinda valley, Odisha (chromite belt) | Small amounts; cobalt is mostly a by-product. The seabed nodules of the Indian Ocean hold nickel, cobalt, copper and manganese |
| Graphite | Arunachal Pradesh, Jharkhand, Odisha, Jammu and Kashmir | Feeds battery anodes after processing |
| Titanium, zirconium | Ilmenite and zircon in the same coastal sands | Co-products of beach-sand mining |
| Copper, tungsten, tin | Khetri (Rajasthan) and Malanjkhand (Madhya Pradesh); Degana (Rajasthan); Bastar (Chhattisgarh) | Copper output is small, so India imports it |
The 5.9 million tonnes at Reasi is an inferred resource (the least certain GSI category) of lithium-bearing material at an early stage of exploration. It is not a proven reserve, and it is not tonnes of pure lithium metal. Questions often test this difference. India also remains almost wholly import-dependent for lithium, cobalt and nickel.
Rare Earths, Monazite and IREL
The 17 rare earth elements are the 15 lanthanides plus scandium and yttrium. Light ones such as lanthanum and cerium go into catalysts and glass polishing. Heavy ones such as dysprosium and terbium let neodymium magnets keep working at high temperature, which is why EV motors and missile fins need them. Gadolinium is used as a contrast agent in MRI scans.
In India most rare earths come from monazite, a phosphate mineral found in coastal beach sands. Rivers carry weathered grains from the ancient granite and gneiss of the Western and Eastern Ghats, and waves sort the heavy grains into dark placer layers at Chavara (Kerala), Manavalakurichi (Tamil Nadu) and Chatrapur near Ganjam (Odisha). Monazite also carries thorium, which is radioactive, so it is handled by the Department of Atomic Energy through IREL (India) Limited, founded in 1950 as Indian Rare Earths Ltd. The same thorium is the fuel of the third stage of India's nuclear programme (see radioactivity and nuclear energy).
India's difficulty is not sand but the next steps: separating individual elements, turning oxides into metals and alloys, and finally making magnets. In April 2025 China restricted exports of seven heavy rare earths (samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium), and Indian carmakers felt it. India's answer is a Rs 7,280 crore scheme (approved 26 November 2025) to build 6,000 tonnes a year of rare earth magnet capacity. The background is in rare earth permanent magnets.
Who Mines, and Who Refines
Lithium comes from two kinds of source. Brines are salty water pumped from under salt flats and left to evaporate in ponds, as in the high Andes. Hard-rock ore (spodumene) is mined and crushed, as in Western Australia. The "lithium triangle" is the high Andean region where Argentina, Bolivia and Chile meet. USGS credits them with about 64 million tonnes of identified resources, out of roughly 150 million tonnes worldwide. Yet the largest miner is Australia, not a triangle country. Batteries take about 88% of all lithium used.
| Mineral | Leading miner | Processing |
|---|---|---|
| Lithium | Australia (hard rock), then China and Chile; Argentina, Zimbabwe rising | China refines most of the world's lithium chemicals |
| Cobalt | Democratic Republic of the Congo: about three-quarters of world output | China refines most of it |
| Nickel | Indonesia, by a wide margin | Largely in Indonesia and China |
| Rare earths | China: about 70% of mine output, and the top reserves | China separates roughly nine-tenths of the world's rare earths |
| Gallium, germanium, graphite | China dominates all three | China imposed export licensing on gallium and germanium in 2023 |
In 2025 the world mined about 390,000 tonnes of rare earth oxide, of which China produced 270,000. The DRC mined 230,000 of about 310,000 tonnes of cobalt. Find the shares.
That is why the Cabinet speaks of "supply chain resilience". India's own scheme targets the middle of the chain: mine → concentrate → refined chemical → battery cell. It supports the refined-chemical step, where India is weakest.
KABIL, the Mission and the New Scheme
KABIL (Khanij Bidesh India Limited) was formed in January 2019 as a joint venture of NALCO, Hindustan Copper and Mineral Exploration Corporation Limited, under the Ministry of Mines, to secure mineral assets abroad. Its flagship deal was signed on 15 January 2024 with CAMYEN, the state mining company of Catamarca province, Argentina, for exploration and mining rights over five lithium brine blocks (about 15,700 hectares), at a cost of about Rs 200 crore.
The National Critical Mineral Mission (NCMM) was approved on 29 January 2025. It combines about Rs 16,300 crore of government money with about Rs 18,000 crore from public sector companies, a total near Rs 34,300 crore over seven years. Its tools are more exploration, block auctions, overseas acquisition, processing parks, recycling and a stockpile. See how it is going in the auction update. India is also eyeing the seabed, as described in offshore mineral blocks.
Support is 30% of eligible investment, capped at Rs 500 crore for each lithium plant and Rs 900 crore for each nickel plant. Which plant sizes hit the cap, and what is the maximum total subsidy?
Minimum plant sizes are 30,000 tonnes for each lithium plant and 50,000 tonnes for each nickel plant. Two beneficiaries per mineral are chosen in a two-stage process: technical qualification first, then the lowest subsidy sought. Payment is made in three tranches linked to milestones.
Lithium, cobalt and nickel can be recovered from used batteries and electronic waste, often called urban mining. It cuts import need and mining damage, which is why the NCMM includes recycling alongside exploration.
How UPSC Has Asked It: Past Papers Solved
Recently the Government of India entered into an agreement for a lithium exploration and mining project with which one among the following countries?
(a) Brazil (b) Australia (c) Argentina (d) Chile
Answer: (c). KABIL signed with CAMYEN of Catamarca, Argentina, in January 2024. Chile and Australia are the tempting options: they are leading lithium producers, but India's deal was not with them.
Which one of the following minerals is used as a fuel in nuclear power stations?
(a) Bauxite (b) Quartz (c) Feldspar (d) Pitchblende
Answer: (d). Pitchblende (uraninite) is the chief ore of uranium. Bauxite is the ore of aluminium, quartz is silicon dioxide, and feldspar is an aluminium silicate.
Which one among the following pairs of mine and mineral is NOT correctly matched?
(a) Bailadila – Iron Ore (b) Zawar – Zinc (c) Ghatsila – Copper (d) Kudremukh – Bauxite
Answer: (d). Kudremukh in Karnataka is an iron-ore mine. The other three pairs are right: Bailadila (Chhattisgarh) iron, Zawar (Rajasthan) zinc, Ghatsila (Jharkhand) copper.
Which two countries signed a US$2·6 billion uranium supply agreement in March 2026 ?
(a) India and Russia (b) India and Canada (c) India and Australia (d) Australia and Canada
Answer: (b). Canada's Cameco agreed to supply about 22 million pounds of uranium concentrate to India between 2027 and 2035, during the Canadian Prime Minister's India visit. Reports put the value at about 2.6 billion Canadian dollars (roughly US$1.9 billion), so the paper's "US$" label is loose, but the pair of countries decides the answer.
Aluminium is manufactured from
(a) Copper ore (b) Bauxite ore (c) Mica ore (d) Manganese ore
Answer: (b). Bauxite is purified to alumina by the Bayer process, and the alumina is then electrolysed (Hall-Héroult process) to give aluminium. Mica is a non-metallic mineral.
Which one of the following is a non-metallic mineral?
(a) Iron ore (b) Mica (c) Copper (d) Bauxite
Answer: (b). Mica is an electrical insulator and yields no metal. Iron ore, copper and bauxite are all metallic minerals.
Climax mine, the largest producer of molybdenum, is located in
(a) Canada (b) USA (c) Australia (d) South Africa
Answer: (b). The Climax molybdenum mine lies in Colorado, United States. Molybdenum hardens steel and is on India's critical list.
UPSC asks mineral-to-place matches, mineral-to-use matches and current-affairs deals (lithium in Argentina, uranium from Canada). Learn each mineral as a triple: ore, main use, main producer. Old questions asked only iron, bauxite and manganese. The newer ones now ask lithium and uranium.
Practice MCQs (with answers)
- Which country accounts for roughly seven-tenths of the world's rare earth mining?
- United States
- Australia
- China
- Brazil
- Khanij Bidesh India Limited (KABIL) was created mainly to
- acquire critical mineral assets abroad
- auction coal blocks
- manage India's strategic oil reserves
- refine uranium
- How many minerals were named in India's 2023 list of critical minerals?
- 10
- 17
- 22
- 30
- Monazite sands, a source of rare earths and thorium, are mainly found on the coasts of
- Gujarat and Rajasthan
- Kerala, Tamil Nadu and Odisha
- Assam and Meghalaya
- West Bengal and Sikkim
- The "lithium triangle" consists of
- Argentina, Bolivia and Chile
- Australia, China and Chile
- Chile, Peru and Brazil
- Congo, Zambia and Zimbabwe
- In February 2023 the Geological Survey of India announced an inferred lithium resource of 5.9 million tonnes at
- Mandya, Karnataka
- Degana, Rajasthan
- Sukinda, Odisha
- Reasi, Jammu and Kashmir
- The Democratic Republic of the Congo is the world's leading producer of
- lithium
- cobalt
- rare earths
- nickel
- The Capex Support Scheme approved on 4 November 2026 targets processing of
- graphite and rare earths
- copper and tin
- lithium and nickel
- gallium and germanium
1-c, 2-a, 3-d, 4-b, 5-a, 6-d, 7-b, 8-c. Q3: 17 is the number of rare earth elements, not of critical minerals. Q5: Australia is the top lithium miner but lies outside the triangle. Q6: Mandya's find is only about 1,600 tonnes. Q8: cobalt is expected as a by-product of nickel processing, but it is not a target mineral.
Quick Revision
- Critical = important + supply risk, not necessarily rare. India's 2023 list: 30 minerals (lithium, cobalt, nickel, graphite, REEs, copper, tin, gallium and others). Lithium was removed from the atomic minerals list in 2023.
- Lithium: Reasi (J&K), 5.9 million tonnes inferred, 2023; Mandya (Karnataka), about 1,600 tonnes. Brine (Andes) or hard rock (Australia). Lithium triangle = Argentina, Bolivia, Chile; top miner Australia.
- Rare earths: 17 elements; monazite beach sands of Kerala, Tamil Nadu, Odisha; IREL (DAE, 1950); thorium link. China: about 70% of mining, about 90% of separation. Magnet scheme: Rs 7,280 crore (26 November 2025).
- Cobalt: DRC, about three-quarters of output. Nickel: Indonesia. India's nickel: Sukinda, Odisha.
- KABIL: January 2019, NALCO + HCL + MECL; Argentina (Catamarca) lithium, 15 January 2024. NCMM: 29 January 2025, about Rs 34,300 crore over seven years.
- 4 November 2026: Rs 2,814 crore processing scheme, 30% capital subsidy, 2 lithium + 2 nickel plants, caps Rs 500 crore and Rs 900 crore, cobalt as by-product.
- Pitchblende = uranium ore; Kudremukh = iron ore; mica = non-metallic; Climax (molybdenum) = Colorado, USA.
Frequently asked questions
What are critical minerals?
Critical minerals are those that the economy and national security badly need but whose supply is risky, because only a few countries mine or process them. India's 2023 list names 30, including lithium, cobalt, nickel, graphite, rare earths, copper and tin. A critical mineral need not be rare.
Where is lithium found in India?
The largest find is at Reasi in Jammu and Kashmir, where the Geological Survey of India reported an inferred resource of 5.9 million tonnes in February 2023. A much smaller occurrence of about 1,600 tonnes was found at Mandya in Karnataka. India still imports almost all of its lithium.
Why are rare earths in the news and where does India get them?
Rare earths make the strongest magnets used in EV motors, wind turbines and defence equipment, and China dominates both mining and separation. India's rare earths come mainly from monazite in the beach sands of Kerala, Tamil Nadu and Odisha, mined by IREL, but it lacks large-scale separation and magnet-making.
What is KABIL?
Khanij Bidesh India Limited is a joint venture of NALCO, Hindustan Copper and Mineral Exploration Corporation Limited, formed in 2019 to secure mineral assets abroad. In January 2024 it signed an agreement for five lithium blocks in Catamarca, Argentina.
What does the November 2026 critical mineral processing scheme do?
The Rs 2,814 crore scheme gives a 30% capital subsidy to set up four processing plants, two for lithium and two for nickel, with a subsidy cap of Rs 500 crore for each lithium plant and Rs 900 crore for each nickel plant. Cobalt is expected as a by-product of nickel.
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