Finance Minister Nirmala Sitharaman announced a Critical Mineral Mission in the Union Budget as the country is facing shortages of critical minerals such as lithium, copper, cobalt and rare earths. It is essentially intended to support sectors such as nuclear power, renewable energy, aerospace, defence, telecom and high-tech electronics. The mission is expected to open up new opportunities for India's mining giants, including Aditya Birla and Vedanta, and for companies in the steel sector with mining experience such as Tata Steel and JSW.

“We will set up a Critical Minerals Mission to ensure domestic production, recycling of critical minerals and acquisition of critical mineral deposits from abroad. Its mandate will include development of technologies, training of skilled manpower, enhanced producer responsibility framework and appropriate financing mechanism,” Sitharaman said in her budget speech.

The government will launch the auction of the first tranche of offshore blocks for mining. India is currently largely dependent on China for critical minerals. The finance minister announced complete exemption from customs duties on 25 critical minerals and reduction of basic customs duty (BCD) on two of them. “This will give a major impetus to the processing and refining of such minerals and help ensure their availability to these strategic and important sectors,” Sitharaman said.

These critical minerals include antimony, beryllium, bismuth, cobalt, copper, gallium, germanium, lithium, niobium, nickel, potash, rare earth elements, tellurium, tin, tungsten, cadmium and silicon (except quartz and silicon dioxide). The duty rate for these minerals was in the range of 2.5 to 10 percent. For silicon quartz and silicon dioxide, the duty rate was reduced from 5 to 7.5 percent to 2.5 percent. For graphite, the duty rate was reduced from 5 to 7.5 percent to 2.5 percent.

Public sector giants such as Coal India, Indian Rare Earths Ltd, Bharat Coking Coal and Central Coalfields will also benefit from the mission as the large public sector companies have experience in critical mining.