The global energy transition is increasingly shaped not just by technology, but by control over critical minerals, the Economic Survey 2026 notes, warning that metals such as lithium, cobalt, nickel, copper, and rare earth elements are emerging as strategic chokepoints affecting energy security, industrial competitiveness, and geopolitical power.
The Survey highlights a growing trend of trade restrictions on critical mineral exports by source countries, underscoring how access to these resources is becoming central to the pace and affordability of the low-carbon transition.
Critical minerals in the US-China trade tussle
China has a near-monopoly on processing rare earths. It leveraged this dominance to counter US tariffs by tightening export controls rather than escalating trade measures. With near-monopoly control over rare-earth processing and a dominant share in refining copper, lithium, cobalt, and graphite, Beijing added minerals to its restricted list and imposed compliance rules on foreign producers using Chinese materials.
Following a Trump–Xi Jinping meeting in Busan in October, China agreed to suspend rare-earth export controls, alongside a partial easing of tariffs, highlighting minerals as a key trade lever.
Copper: A case study
Among critical minerals, copper is increasingly price-volatile due to mine outages in Indonesia, Congo, and Chile, rising concerns over medium- to long-term supply deficits, and growing demand from the global power sector and data centres.
The Survey notes that current copper demand trajectories, amplified by renewable energy deployment and the proliferation of AI data centres, risk outpacing supply. To illustrate material intensity, it states that a single 1 GW wind turbine requires about 2,866 tonnes of copper, involving the processing of nearly 4.8 lakh tonnes of ore before accounting for waste rock and overburden.
Energy transition carries heavy material and energy costs
Highlighting material requirements for renewable energy, the Survey states that 1 GW of solar capacity requires approximately 18.5 tonnes of silver, 2,000–3,000 tonnes of polysilicon, and over 10,000 tonnes of aluminium.
Producing these materials is itself energy-intensive. Manufacturing the aluminium required for 1 GW of solar capacity consumes nearly 1.95 million gigajoules of energy—the equivalent of the annual electricity consumption of over 100,000 average households.
Standards-based markets: Opportunity and risk
Advanced economies are responding to mineral supply risks by promoting standards-based critical mineral markets focused on sustainability, traceability, and governance. Initiatives such as the G7 Roadmap to Promote Standards-Based Markets for Critical Minerals aim to enhance transparency and reduce concentration risks.
The US is actively seeking to reduce reliance on China by building alternative supply chains through partnerships and domestic investment. It signed an agreement with Australia, backed by an $8.5 billion project pipeline and a proposed strategic reserve for rare earths and lithium, and committed $1.6 billion to USA Rare Earth to strengthen domestic capacity.
Washington has also explored access to minerals in other regions, including Greenland, though alternatives to China’s processing dominance remain limited.
Challenges for developing economies
From the perspective of developing countries, the Survey flags three major concerns. First, high compliance costs could deter investment, slow project development, and constrain supply at a time of accelerating global demand.
Second, narrowly defined or asymmetrically enforced standards risk locking resource-rich countries into low-value segments of supply chains, with value-added processing concentrated in advanced economies.
Third, sustainability premiums that raise mineral prices without parallel support for finance, technology, and capacity-building could undermine affordability, disproportionately impacting emerging economies.
India’s balancing act
India’s approach, according to the Survey, reflects a balance between strengthening domestic capabilities and engaging globally. The National Critical Mineral Mission (NCMM) anchors this strategy, complemented by international partnerships such as the Minerals Security Partnership and the Indo-Pacific Economic Framework.
The Survey notes amendments to the Mines and Minerals (Development and Regulation) Act that expand central government authority to auction critical minerals and open previously restricted minerals to private participation, alongside enhanced exploration efforts by the Geological Survey of India.
Building supply chain resilience
The Union Cabinet has approved the NCMM with a financial outlay of ₹16,300 crore, alongside expected investments of ₹18,000 crore from PSUs and other entities. The Mission aims to strengthen value chains across exploration, mining, processing, and recycling.
A ₹1,500 crore incentive scheme for critical mineral recycling has also been approved, targeting the extraction of minerals from secondary sources and end-of-life products.
The Survey underscores that a durable global framework for critical minerals must be inclusive, capacity-sensitive, and development-oriented, warning that a transition that is clean but unaffordable will be neither rapid nor just.
