India struggles to secure critical minerals despite global deals
The Steel Authority of India Ltd. (SAIL) recently imported one tonne of Mongolian coking coal by air, marking a modest but symbolic advance in India’s efforts to secure critical minerals from abroad. This test shipment reflects the lengthy process of converting overseas acquisitions into functional domestic supplies. For years, India—the world’s third-largest coal consumer—has faced persistent delays in strengthening its mineral supply chains, despite rising demand for copper, lithium, and rare earths.
Domestic production of these minerals remains insufficient to meet growing needs. The government established Khanij Bidesh India Limited (KABIL), a state-backed entity, to secure overseas assets and address these shortages. Its first major initiative, a lithium-brine operation in Argentina, now faces a revised timeline, with commercial production expected only around 2030, nearly a decade after initial plans. Delays in Argentina are not an isolated issue. KABIL and other Indian firms have also explored lithium projects in Australia, but high valuations and fierce competition, including losses to South Korea’s POSCO, have hindered progress. India’s underdeveloped lithium value chain further complicates investment decisions, as global price fluctuations make long-term commitments risky.
Meanwhile, Lohum, a critical minerals company, has pursued a different strategy in Zimbabwe by acquiring rights to 10 lithium-bearing blocks and shipping its first ore last month. The company plans a $100 million investment there, but Zimbabwe’s recent ban on raw mineral exports has introduced new challenges. Indian firms may now need to process lithium locally before shipping refined products back to India, adding complexity and cost to their operations. Lohum is also exploring nickel assets in Indonesia and the Philippines, though these remain in early stages.
Copper presents an even more urgent challenge. Without new domestic mines, India’s reliance on imported copper concentrate could reach 91–97% by 2047, according to the Ministry of Mines. Two major Indian players are actively securing supplies. Lloyds Metals acquired a copper and cobalt producer in the Democratic Republic of Congo (DRC) through a distressed-asset deal, gaining control of mines and processing facilities. The DRC, like Zimbabwe, is pushing for increased local processing, which could require Indian firms to invest further abroad.
Adani Enterprises is taking a different approach. Its subsidiary, Kutch Copper, operates a smelting and refining complex in India and has signed non-binding agreements in Australia and Chile. In Australia, it is partnering with Caravel Minerals for potential copper offtake, though a final investment decision is not expected until 2027. In Chile, Adani is collaborating with state-owned Codelco to evaluate three copper projects, though production remains years away.
The success of these efforts hinges on more than securing mining rights or signing agreements. The minerals must actually reach Indian factories, which requires overcoming significant logistical and operational hurdles. Roads, railways, power grids, and water access in host countries often lag behind mining operations, forcing Indian firms to invest in infrastructure abroad before extraction can even begin. Local laws can change, community opposition can arise, and commodity prices can shift unexpectedly. By the time a mine starts producing, market conditions may no longer support the project’s viability.
India’s Overseas Mineral Projects Beyond Lithium and Copper
Indian companies are advancing exploration for rare earths, graphite, and other critical minerals through international partnerships. Midwest, based in Hyderabad, is evaluating rare-earth opportunities in Indonesia, while Deccan Gold is assessing lithium and additional minerals in Mozambique. These efforts remain in early stages, with most projects still undergoing feasibility studies or environmental assessments.
Sakariya Mines is developing a graphite project in Tanzania, though progress has been slow due to regulatory and infrastructure challenges. Coal India is separately exploring lithium deposits in Chile alongside other mineral resources, while also establishing a commodity trading platform in Singapore to facilitate global market access. These initiatives aim to diversify India’s mineral supply sources beyond traditional routes.
At a more advanced stage, JSW Steel and International Coal Ventures Pvt. Ltd. (ICVL) have integrated overseas coal assets, particularly in Mozambique, into their domestic steel production operations. These projects represent rare cases where foreign acquisitions have successfully contributed to India’s industrial needs, though scaling such models remains difficult for other minerals.
