Critical Minerals Crisis: Currently, there is a race going on all over the world to grab critical minerals. On the other hand, supply chain disruptions related to China have raised India’s concerns. India is not able to start most of its mines at such a critical time. A recent review report by the Ministry of Coal and Mines revealed this shocking fact. According to a news item in the Economic Times, India is still heavily dependent on imports. Obstacles in starting work at the grassroots level have held the entire system in check. In the concept note shared ahead of the Sixth National Conference of Chief Secretaries, the Union Government has clearly stated that states will now have to work in mission mode for energy security and economic development.

Approvals of 608 mines stuck in paper

If we look at the government statistics, the seriousness of the situation can be understood immediately. Various states have so far auctioned a total of 733 mineral blocks. But till August 2026, only 125 of these mines have started operations. The remaining 608 mines are stuck in various levels of government approvals. In case of large and critical mineral blocks, the time between auction and commencement of production is more than seven years. The complexity of regulations and lengthy approval process are the major reasons for this. This delay is causing direct financial loss to the country. More than 1.9 lakh crore rupees come into the government exchequer every year from the mining sector. The special thing is that 90 percent of this amount goes directly to the states.

Lack of technology has made the crisis worse

India produces more than 95 minerals, including lithium and cobalt, but at a very slow pace. In case of critical minerals, India has to depend on Chinese supply chain and technology. Surface minerals are now being depleted. In such a situation deep-drilling technology is required to extract the minerals buried deep in the ground. India still has this technology at an early stage. Importing modern technology from abroad is very expensive. For this reason investors are also avoiding taking risks. Besides, the country has very little capacity to process high purity minerals. The Center has asked states to build infrastructure to extract minerals like monazite found in beach sand to make rare earth elements easily available for new age industries. On the other hand, GIS-based data and clear regulations are lacking even in the case of secondary minerals. This is leading to unscientific mining, which is damaging the local environment.

Land acquisition became the biggest hurdle

A total of nine levels of challenges have arisen since the mines were not able to start. Among these, land acquisition is the biggest headache. Incomplete land records, ownership disputes, complex compensation calculations and displacement issues have stalled work in the states. Even taking possession of the land faces huge opposition. States do not have pre-designated land banks for planting trees in lieu of deforestation. Due to which forest clearance proposals are stalled. Apart from this, due to law and order problem mining and transportation of minerals also comes to a standstill. Illegal mining of sand and stone is not only spoiling the river bed, but also causing huge loss in royalty to the government.

The mining sector fell into the tax trap

Even at the administrative level, the problem is not less. States have levied various types of cesses and taxes at their level. The approval has to be sought from different departments one after the other. Absence of a single-window portal for minor minerals and delay in district survey reports hamper the work. There is also no strong logistics infrastructure to transport the goods from the mine to the right place. Mines require major improvements in connectivity to main roads or railway sidings, ports, stockyards and transit permit systems. The Center has advised the states to adopt a full value chain approach using clean technologies. It includes a complete roadmap from resources to earnings, from auctions to starting a mine and making Kanchan from waste.