Why critical minerals are in focus as Modi visits Australia – Firstpost

Prime Minister Narendra Modi’s visit to Australia from July 8 to 10 is expected to place critical minerals and strategic supply chains at the centre of India-Australia relations.

Both countries are seeking to strengthen their positions in an increasingly competitive Indo-Pacific as access to the raw materials that power modern technology has emerged as one of the defining issues of the relationship.

Why have critical minerals become so important?

Critical minerals have moved from being a niche mining sector issue to
becoming one of the most strategically important resources in the global economy.

These materials form the foundation of technologies that countries increasingly rely upon for economic growth, industrial competitiveness and national security.

They are used in manufacturing electric vehicle batteries, semiconductors, solar panels, wind turbines, electrical grids, aerospace components, advanced electronics, telecommunications equipment and military hardware.

Despite the widespread use of the term, “critical minerals” is not a scientific classification. Instead, it is an economic and strategic designation adopted by individual governments.

Each country prepares its own list depending upon national priorities, but two broad factors generally determine whether a mineral receives this classification.

The first is whether the mineral is indispensable for sectors considered vital to the economy, defence or technological advancement.

The second concerns supply risk. If obtaining that mineral becomes vulnerable because of limited global production, geopolitical tensions, export controls or dependence on a handful of suppliers, governments often classify it as critical.

In other words, a mineral becomes “critical” not simply because of what it is, but because countries cannot easily replace it if supplies are disrupted.

Among the most widely recognised critical minerals are lithium, cobalt, nickel, graphite, manganese and copper. Each of these plays a different but essential role across modern industries.

• Lithium has become synonymous with rechargeable batteries used in electric vehicles and large-scale energy storage systems.

• Cobalt is widely used in high-density battery chemistries while also finding applications in aerospace manufacturing.

• Nickel strengthens battery performance and is also a crucial ingredient in stainless steel and high-performance alloys.

• Copper remains indispensable for electrical transmission networks, wiring and semiconductor manufacturing.

• Natural graphite serves as the primary material for battery anodes, making it another essential component in lithium-ion battery production.

Collectively, these materials underpin the technologies that governments across the world view as central to future economic competitiveness.

Are critical minerals and rare earth elements the same thing?

The terms “critical minerals” and “rare earth elements” are often used interchangeably in public discussions, but they refer to different concepts.

Understanding this distinction is important because both categories play significant roles in advanced technologies, yet they are defined differently.

Critical minerals represent a broad policy category. Rare earth elements, by contrast, are a scientifically defined family of chemical elements.

The simplest way to understand the difference is that every rare earth element is generally considered a critical mineral because of its strategic importance, but many critical minerals are not rare earth elements.

Rare earth elements consist of 17 chemically related elements on the periodic table.

This group includes the 15 lanthanides along with scandium and yttrium. Their unique magnetic, luminescent and electrochemical characteristics make them difficult to substitute in many advanced technologies.

These properties explain why they are used in products ranging from guided missiles and defence equipment to smartphone displays, electric vehicle motors and the permanent magnets installed inside modern wind turbines.

Among the better-known rare earth elements are neodymium, dysprosium, lanthanum and cerium. Despite the name, these materials are not especially scarce within the Earth’s crust.

The word “rare” has historically created misconceptions. In reality, many rare earth elements occur in relatively abundant quantities.

The challenge lies elsewhere. Rather than appearing in concentrated deposits, they are usually dispersed in very small quantities alongside other minerals.

Extracting and refining them therefore requires complex processing techniques, something which China reportedly possesses, making production technically demanding, environmentally challenging and commercially expensive.

Critical minerals encompass a much broader range of materials than rare earth elements.

Besides rare earths, the category also includes battery minerals such as lithium, cobalt and nickel, industrial metals like copper and titanium, as well as several other materials considered indispensable for future industries.

Their primary risks also differ. For many critical minerals, governments worry about fluctuating demand, supply bottlenecks and limited processing capacity.

Rare earth elements, meanwhile, are particularly sensitive because mining and refining remain geographically concentrated, creating concerns about excessive dependence on a limited number of suppliers.

Why is India looking towards Australia for these resources?

India is pursuing ambitious plans across several sectors simultaneously.

These include expanding domestic semiconductor manufacturing, increasing renewable energy generation, strengthening electric mobility, building advanced electronics capabilities and encouraging greater domestic manufacturing through various industrial initiatives.

However, achieving these objectives depends upon reliable access to raw materials that India currently produces only in limited quantities — or, in some cases, not at all.

Several of the most important minerals used in batteries and advanced manufacturing continue to be imported almost entirely from overseas. India currently depends completely on imports for lithium, which forms the backbone of lithium-ion batteries used in electric vehicles and large-scale energy storage.

The country is also entirely reliant on imports for cobalt, an essential component in high-density batteries and aerospace applications. Nickel, another key ingredient used in battery manufacturing as well as stainless steel and superalloys, is likewise sourced entirely from foreign suppliers.

Dependence extends beyond battery materials. More than 90 per cent of India’s copper requirements continue to be met through imports. Copper remains indispensable for electrical grids, power transmission infrastructure and semiconductor wiring.

Around 60 per cent of the country’s natural graphite demand also comes from overseas sources, even though graphite plays a central role in manufacturing battery anodes.

The financial implications have become increasingly significant. India’s expenditure on importing critical minerals has risen sharply in recent years.

The country’s critical mineral import bill has increased from approximately $3.03 billion to $8.01 billion. Such reliance exposes manufacturers to price volatility, geopolitical tensions and disruptions affecting global supply chains.

Recognising these vulnerabilities, New Delhi has launched the National Critical Minerals Mission (NCMM),
a programme backed by an allocation of Rs 343 billion (approximately $4.1 billion).

The mission is intended to strengthen India’s long-term access to strategic raw materials that are considered essential for economic development and national security.

Rather than relying solely on international markets, India is increasingly exploring overseas investments, partnerships and long-term procurement arrangements that can provide greater certainty for domestic industries.

This is where Australia assumes particular importance. According to India’s official list, Australia possesses reserves of 21 of the 49 minerals that New Delhi has classified as critical.

Its extensive deposits of lithium, cobalt, rare earth elements and several other strategic minerals position it as one of the few countries capable of supporting India’s expanding manufacturing ecosystem over the coming decades.

The importance of this mineral partnership was highlighted in a report released by Rubix Data Sciences ahead of Modi’s visit. According to the report, the evolution of India-Australia ties increasingly revolves around strategic resources rather than conventional trade alone.

“What most conversations about India-Australia trade miss is the minerals dependency running through it,” Rubix Data Sciences President Tushar Bhaskar said in the press release shared with Firstpost.

“Australia holds 21 of the 49 minerals India has flagged as critical, at a time when India’s clean energy and semiconductor ambitions need exactly that kind of supply security. We feel that is a bigger long-term story than the trade deficit numbers,” he added.

The report also noted that Australia’s reserves of lithium, cobalt and rare earth elements make the country an increasingly valuable partner as India expands electric vehicle manufacturing, renewable energy capacity and semiconductor production.

How does Australia fit into India’s long-term plans?

Australia has emerged as one of the few countries capable of supplying a broad spectrum of minerals that are becoming increasingly indispensable for advanced manufacturing, clean energy technologies and strategic industries.

According to the latest data compiled by Geoscience Australia through the Australian Inventory of Resources (AIMR), the country possesses one of the world’s strongest mineral endowments, making it a global leader across several commodities that are expected to shape the future economy.

Australia currently ranks first globally in reserves or production for multiple strategic resources.

Among them is lithium, where Australia is both the world’s largest producer and the holder of the largest hard-rock lithium reserves. Lithium production has continued to expand, with output rising by 14 per cent according to the latest figures.

The country also possesses around one-third of the world’s known uranium reserves, making it the single largest holder of the fuel that underpins civilian nuclear energy programmes across several countries.

Australia occupies another prominent position in rare earth elements, holding roughly 8 per cent of global reserves while accounting for around 7 per cent of worldwide production. Recent data also show that rare earth production has grown by approximately 7 per cent.

Australia is also among the world’s leading holders of cobalt reserves, an important by-product of nickel mining that is widely used in batteries and aerospace applications.

The country has also strengthened its position in titanium-bearing minerals, recently becoming the world’s leading holder of economic demonstrated resources of ilmenite  —the principal source of titanium — along with rutile.

Titanium remains an important material for aerospace manufacturing, defence platforms and other advanced industrial applications.

The country’s mining sector has also recorded notable increases in production across several strategic commodities.

Output of tungsten, which is widely used in hardened steel and defence manufacturing, has surged by more than 90 per cent. Production of molybdenum, an important ingredient in high-strength structural steel alloys, has increased by 59 per cent.

Meanwhile, tantalum production has grown by 26 per cent. Tantalum is a key material used in capacitors found in advanced electronic devices.

To sustain future production, Canberra has also launched a long-term geological mapping initiative aimed at identifying additional deposits across the continent. The programme, known as Resourcing Australia’s Prosperity, represents a $3.4 billion investment spread over 35 years.

Managed by Geoscience Australia, the initiative focuses on mapping deep geological structures in order to identify future reserves of critical minerals.

Why are lithium and uranium expected to dominate the discussions?

Among all the minerals expected to feature during Modi’s visit, lithium is likely to receive particular attention because of its central role in India’s transition towards electric mobility and renewable energy.

Lithium-ion batteries have become the dominant technology powering electric vehicles, stationary energy storage systems and numerous electronic devices. As India seeks to accelerate electric mobility, demand for lithium is expected to rise dramatically.

Industry projections indicate that India’s lithium-ion battery market could expand from approximately 10.8 gigawatt hours (GWh) today to 160.3 GWh by 2030.

A significant portion of this anticipated growth is expected to come from increasing adoption of electric two-wheelers and three-wheelers, segments where India already represents one of the world’s largest markets.

Meeting this demand will require secure and predictable supplies of lithium over many years.

Australia is uniquely positioned in this regard. Much of its lithium production comes from vast hard-rock spodumene deposits, including the globally significant Greenbushes mine in Western Australia, which remains one of the world’s largest lithium operations.

Rather than relying exclusively on imports through commodity markets, India is increasingly exploring direct participation in overseas mining projects.

One area expected to feature during bilateral discussions is the expansion of joint investment frameworks that would allow Indian public sector entities to participate directly in Australian mining operations.

Among those expected to play a role is Khanij Bidesh India Limited (KABIL), the state-backed company established to secure overseas mineral assets. Such arrangements could include equity participation in mining projects or long-term off-take agreements that provide Indian manufacturers with stable access to lithium supplies.

Beyond battery minerals, uranium is expected to emerge as another important area of discussion. Australia possesses approximately one-third of the world’s known uranium reserves, making it one of the most significant potential suppliers of nuclear fuel.

India and Australia signed a civil nuclear cooperation agreement more than a decade ago, creating the framework for uranium trade.

However, commercial implementation has progressed gradually because of regulatory procedures and international safeguard requirements governing civilian nuclear cooperation.

India’s electricity demand continues to increase as industrial activity expands and energy-intensive sectors — including emerging technologies such as artificial intelligence data centres — require reliable sources of baseline power.

Against this backdrop, India is expanding its civilian nuclear energy programme. The current discussions are expected to focus on operational pathways that could enable Australia to become a stable long-term supplier of uranium for India’s safeguarded nuclear reactors.

How is the ECTA faring?

While critical minerals dominate the strategic conversation,
the broader economic framework supporting this partnership is the India-Australia Economic Cooperation and Trade Agreement (ECTA).

The agreement entered into force in 2022 and has steadily expanded commercial opportunities for businesses in both countries. One of the most significant milestones came in January earlier this year, when all Indian exports gained duty-free access to the Australian market.

According to the report released by Rubix Data Sciences, bilateral trade has shown signs of becoming more balanced. India’s trade deficit with Australia narrowed significantly to $6.5 billion during FY2026, as imports from Australia declined faster than the growth in Indian exports.

The report described this trend as evidence of a gradual rebalancing in bilateral trade. Overall economic engagement has also continued to expand.

Trade in goods and services between the two countries has reached $54.4 billion, making India Australia’s fifth-largest trading partner. Historically, the trade relationship was dominated by conventional energy flows.

India primarily exported refined petroleum products to Australia, while Australia remained a major supplier of coal to India. Although energy continues to account for a substantial share of bilateral trade, the relationship is increasingly broadening into new sectors.

Defence, advanced manufacturing, critical technologies, hydrogen, clean energy and strategic supply chains are now emerging as important areas of cooperation.

Another notable trend has been the integration of Australia’s mining equipment, technology and services (METS) sector with India’s industrial expansion, supported by tariff reductions under the trade agreement.

What role does the Quad play in this?

India-Australia cooperation on critical minerals is also being reinforced through broader multilateral initiatives in the Indo-Pacific.

One of the most significant recent developments came on May 26, when India, Australia, Japan and the United States
established the Quad Critical Minerals Initiative Framework.

The initiative reflects growing concern among Quad members over concentrated global supply chains for strategic minerals and the need to build more resilient alternatives. According to the framework, participating countries aim to mobilise up to $20 billion in combined public and private investment for projects connected to the critical minerals sector.

The initiative covers the entire value chain rather than focusing solely on mining.

Its objectives include identifying and financing strategic mining projects, expanding mineral processing capacity, supporting recycling initiatives and strengthening investment across projects that have a Quad connection.

The framework also seeks to improve coordination among member countries by streamlining environmental approvals and regulatory processes where possible.

Another area of focus is strengthening collective resilience against non-market practices and export restrictions imposed by dominant global suppliers of strategic minerals.

For India and Australia, this multilateral initiative complements their bilateral cooperation.

With inputs from agencies