For a brighter future, critical minerals deserve closer attention

India should start investing in the mining and production of critical minerals to meet the emerging demand for high-tech applications

- G CHANDRASHEKHAR

As the name suggests, rare earths and critical minerals are rare in availability and critical for many high-tech applications, including defense, space-tech, electric mobility, and so on. China is a dominant producer and exporter of many of these minerals.

Instead of feeling rattled by the imposition of stiff tariffs by the US, China has quietly restricted the supply of rare earth and critical minerals. This is seen as a moderated response. Currently, export restrictions have been placed on seven rare earth elements that are used for high-tech applications.

To be sure, these rare earth minerals and special magnets made therefrom are crucial for the world's automotive, semiconductor, energy, and aerospace industries. These can now be shipped out of China only with special export licenses.

Interestingly, Beijing has barely started setting up a system for issuing the licenses. In other words, in the short run, supplies of critical minerals and products outside the country could get tight. This is sure to impact the high-tech industries of the US. China has adopted non-tariff measures too. The Asian major has expanded its export controls. There are restrictions on the export of critical minerals (tungsten, molybdenum, bismuth, indium, etc.). Exporters in China have to obtain licenses from the Chinese ministry of commerce. This can potentially disrupt the supply chains of the US companies that rely on these materials.