<h2><strong>Executive Summary</strong></h2><ul><li><p>Control over critical minerals will be a <strong>defining strategic lever</strong>, shaping areas such as AI, electrification, defence and infrastructure.</p></li><li><p>India is heavily <strong>import dependent</strong> on minerals, and has limited refining capacity.</p></li><li><p>Copper, aluminium, gallium and germanium carry <strong>material exposure</strong> across sectors, often deep within supply chains.</p></li><li><p>Structural constraints, declining ore grades and long gestation periods suggest the current <strong>price volatility</strong> may be a continuing issue.</p></li><li><p>Regulatory expansion through <strong>extended producer responsibility</strong> is set to move mineral accountability onto corporate balance sheets.</p></li><li><p>Businesses must quantify mineral sensitivity, reassess supply strategies and <strong>embed materials risk into capital planning</strong>.</p></li></ul>.<p>At a recent joint session of the India CEO and CFO Forum in Delhi, Rajat Verma, Founder and CEO of Lohum, moved the conversation beyond commodities and into control. The discussion centred on whether corporate India is starting to treat critical minerals as the strategic variables they are. Global competition has shifted from securing oil flows to securing mineral value chains. Electrification, AI infrastructure, energy transition and defence manufacturing have intensified demand for key materials. As a result, minerals that were once confined to specialist industries now influence cost structures across the economy.</p><h2><strong>From Oil Security to Materials Security</strong></h2><p>Most major economies now maintain formal lists of critical minerals, and there is substantial overlap across these lists. India has identified 30 critical minerals, 24 of which are deemed supercritical. This reflects a simple reality: materials underpin value creation in sectors far removed from mining. AI requires data centres. Data centres require copper, aluminium, silicon and specialty materials. EVs require lithium, nickel and cobalt. Solar power depends on silver and copper. Material intensity is rising across the industrial base. Increasingly, then, minerals need to be evaluated not on price alone, but on their economic importance, supply risk and regulatory salience.</p><h2><strong>What Makes a Mineral ‘Critical’?</strong></h2><p>A mineral becomes critical when two conditions converge:</p><ul><li><p>It contributes meaningfully to gross value addition across industries.</p></li><li><p>Its supply is exposed to concentration risk or geopolitical leverage.</p></li></ul><p>This explains why even certain materials with modest content value get classified as ‘critical’. Germanium, for instance, is used in small quantities, but it enables miniaturisation in advanced electronics. Substitutes for germanium are not immediately available and the supply concentration remains high. That combination creates leverage. It also explains why definitions differ across countries. Aluminium is classified as critical in the US, but not in India, because adequate domestic supply chains exist here. Copper, by contrast, has been classified as critical in India due to its central role in electrification.</p><p>Rare earth elements are often misunderstood. They are not considered ‘rare’ because they exist in vanishingly small quantities, or only in specific places. They are ‘rare’ because they occur in low concentrations within ore bodies, making extraction and refining complex. They form a subset of critical minerals, not a synonym. The distinction matters because criticality is as much about refining and processing as it is about mining.</p><h2><strong>India’s Structural Vulnerability</strong></h2><p>India is 100% import dependent for minerals like lithium, cobalt and nickel. Processing gaps remain significant, particularly in rare earths and advanced battery materials. Globally, refining capacity for most critical minerals is highly concentrated. Many countries dig minerals out of the ground, but few have the capacity to process them into usable industrial material; in several categories, a single country (usually Cina) processes 60-90% of global output. This creates strategic risks, since control over downstream processing often confers greater leverage than control over ores. Take, for instance, titanium dioxide, which is fundamental to producing paint and coatings. Its whiteness reflects heat, reducing thermal load in applications ranging from buildings to electronics. Although India possesses mineral resources, its refining capacity is limited. As a result, companies depend on global suppliers for something as basic as industrial coatings.</p><p>Similarly, gallium and germanium are required for high-efficiency semiconductors. The global requirement for these minerals amounts to just several hundred tons a year, yet their role in miniaturisation and energy efficiency is irreplaceable. Substitution cycles can take decades to run. During that window, supply concentration equates to strategic leverage. High-purity silicon offers another illustration. As chip sizes move towards two and three nanometres, impurity tolerance falls to parts per trillion. Purity becomes imperative to industry, narrowing supply chains further.</p><p>The National Critical Mineral Mission recognises of these vulnerabilities, and India has announced funding commitments for exploration and to build processing capacity. Yet, in the absence of downstream manufacturing, building refining scale may create new export dependencies rather than building domestic resilience.</p><h2><strong>Materiality Across Industries</strong></h2><p>Critical minerals are not confined to mining companies, but sit on balance sheets across sectors:</p><ul><li><p><strong>Automotive: </strong>Raw critical mineral content, including copper, can represent 10-20% of an EV’s cost before value addition. Price volatility here directly affects margin stability.</p></li><li><p><strong>Data Centres: </strong>AI usage will trigger the creation of massive new data centre capacity. Copper and aluminium are embedded across transformers, busbars, PCBs and cooling systems. Meanwhile, gallium and germanium enable energy efficiency and miniaturisation.</p></li><li><p><strong>Construction and Infrastructure: </strong>Most large projects hinge on copper wiring, aluminium structures, and coatings such as titanium dioxide. Cost escalations in these materials can significantly affect project budgets.</p></li><li><p><strong>Aerospace and Defence: </strong>Airplanes contain substantial volumes of titanium and specialty alloys, and geopolitical disruption is forcing backward supply-chain integration of these materials.</p></li><li><p><strong>Solar and Energy: </strong>Silver prices have turned volatile owing to strong industrial demand from the solar, battery and electronics segments.</p></li></ul><p>Collectively, critical minerals represent an estimated trillion-dollar materials base globally. Copper alone accounts for roughly half of that value. Electrification ensures that copper demand will remain central to modernisation across emerging markets. No sector is insulated.</p><h2><strong>Supercycle or Speculation?</strong></h2><p>Historically, real commodity prices trend downward over time as productivity improves. However, structural shocks regularly give rise to supercycles. Over the past century, four major supercycles have played out, coinciding with WW1, post-WW2 reconstruction, the oil shocks of the 1970s and the rise of China in the 2000s. Several factors suggest the possibility that another supercycle, driven by electrification, AI infrastructure and supply chain weaponisation, may now be underway:</p><ul><li><p>Declining ore grades, which increases extraction complexity.</p></li><li><p>Any new mines will require 10-15 years from discovery to production.</p></li><li><p>Water stress is affecting the efficiency of lithium extraction.</p></li><li><p>Tailings volumes are expanding as ore concentrations decline.</p></li><li><p>Environmental and humanitarian scrutiny are limiting mining and exploration.</p></li></ul><p>These factors imply volatility underpinned by structural tightness. For budgeting cycles, copper’s range matters. Minor analytical revisions can trigger sharp price movements. For CFOs, hedging strategies and sensitivity modelling become essential.</p><h2><strong>Regulation and Circularity</strong></h2><p>Regulation is expanding alongside demand. In India, critical minerals are under Central oversight, and extended producer responsibility frameworks already apply to batteries. Discussions are underway to extend EPR to non-ferrous metals and potentially across the entire critical mineral list.</p><p>Such shifts would impose collection, recycling and reporting obligations across industries. Recycling capacity itself is constrained by collection realities. Government estimates of end-of-life volumes often exceed ground availability due to extended product lifecycles and informal sector dynamics. Organised recyclers face cost pressures relative to unorganised players. Nevertheless, circularity is becoming a strategic lever. Companies may need to invest directly in recycling capacity or secure partnerships to manage future compliance and resource access.</p><h2><strong>The CXO Lens</strong></h2><p>The strategic response begins with quantification. First, companies must map critical minerals beyond tier-1 suppliers. Exposure often sits at tier-3 or tier-4, embedded within alloys or subcomponents. Second, financial sensitivity must be modelled. <em>(What is the EBITDA impact if copper moves from $12 to $15/kg? What is exposure to silver or cobalt spikes?)</em> Third, strategic levers must be evaluated, including: backward integration into refining or recycling; stockpiling critical inputs; supplier diversification; long-term offtake agreements; and investments in substitution, wherever feasible. <em>(Here, global precedents offer some guidance: Aerospace firms have integrated upstream to secure titanium supply; technology companies have invested in rare earth mining to protect component access.)</em> Finally, boards must treat materials risk as quantifiable. Critical minerals should shift from sustainability narratives to capital allocation frameworks.</p>
<h2><strong>Executive Summary</strong></h2><ul><li><p>Control over critical minerals will be a <strong>defining strategic lever</strong>, shaping areas such as AI, electrification, defence and infrastructure.</p></li><li><p>India is heavily <strong>import dependent</strong> on minerals, and has limited refining capacity.</p></li><li><p>Copper, aluminium, gallium and germanium carry <strong>material exposure</strong> across sectors, often deep within supply chains.</p></li><li><p>Structural constraints, declining ore grades and long gestation periods suggest the current <strong>price volatility</strong> may be a continuing issue.</p></li><li><p>Regulatory expansion through <strong>extended producer responsibility</strong> is set to move mineral accountability onto corporate balance sheets.</p></li><li><p>Businesses must quantify mineral sensitivity, reassess supply strategies and <strong>embed materials risk into capital planning</strong>.</p></li></ul>.<p>At a recent joint session of the India CEO and CFO Forum in Delhi, Rajat Verma, Founder and CEO of Lohum, moved the conversation beyond commodities and into control. The discussion centred on whether corporate India is starting to treat critical minerals as the strategic variables they are. Global competition has shifted from securing oil flows to securing mineral value chains. Electrification, AI infrastructure, energy transition and defence manufacturing have intensified demand for key materials. As a result, minerals that were once confined to specialist industries now influence cost structures across the economy.</p><h2><strong>From Oil Security to Materials Security</strong></h2><p>Most major economies now maintain formal lists of critical minerals, and there is substantial overlap across these lists. India has identified 30 critical minerals, 24 of which are deemed supercritical. This reflects a simple reality: materials underpin value creation in sectors far removed from mining. AI requires data centres. Data centres require copper, aluminium, silicon and specialty materials. EVs require lithium, nickel and cobalt. Solar power depends on silver and copper. Material intensity is rising across the industrial base. Increasingly, then, minerals need to be evaluated not on price alone, but on their economic importance, supply risk and regulatory salience.</p><h2><strong>What Makes a Mineral ‘Critical’?</strong></h2><p>A mineral becomes critical when two conditions converge:</p><ul><li><p>It contributes meaningfully to gross value addition across industries.</p></li><li><p>Its supply is exposed to concentration risk or geopolitical leverage.</p></li></ul><p>This explains why even certain materials with modest content value get classified as ‘critical’. Germanium, for instance, is used in small quantities, but it enables miniaturisation in advanced electronics. Substitutes for germanium are not immediately available and the supply concentration remains high. That combination creates leverage. It also explains why definitions differ across countries. Aluminium is classified as critical in the US, but not in India, because adequate domestic supply chains exist here. Copper, by contrast, has been classified as critical in India due to its central role in electrification.</p><p>Rare earth elements are often misunderstood. They are not considered ‘rare’ because they exist in vanishingly small quantities, or only in specific places. They are ‘rare’ because they occur in low concentrations within ore bodies, making extraction and refining complex. They form a subset of critical minerals, not a synonym. The distinction matters because criticality is as much about refining and processing as it is about mining.</p><h2><strong>India’s Structural Vulnerability</strong></h2><p>India is 100% import dependent for minerals like lithium, cobalt and nickel. Processing gaps remain significant, particularly in rare earths and advanced battery materials. Globally, refining capacity for most critical minerals is highly concentrated. Many countries dig minerals out of the ground, but few have the capacity to process them into usable industrial material; in several categories, a single country (usually Cina) processes 60-90% of global output. This creates strategic risks, since control over downstream processing often confers greater leverage than control over ores. Take, for instance, titanium dioxide, which is fundamental to producing paint and coatings. Its whiteness reflects heat, reducing thermal load in applications ranging from buildings to electronics. Although India possesses mineral resources, its refining capacity is limited. As a result, companies depend on global suppliers for something as basic as industrial coatings.</p><p>Similarly, gallium and germanium are required for high-efficiency semiconductors. The global requirement for these minerals amounts to just several hundred tons a year, yet their role in miniaturisation and energy efficiency is irreplaceable. Substitution cycles can take decades to run. During that window, supply concentration equates to strategic leverage. High-purity silicon offers another illustration. As chip sizes move towards two and three nanometres, impurity tolerance falls to parts per trillion. Purity becomes imperative to industry, narrowing supply chains further.</p><p>The National Critical Mineral Mission recognises of these vulnerabilities, and India has announced funding commitments for exploration and to build processing capacity. Yet, in the absence of downstream manufacturing, building refining scale may create new export dependencies rather than building domestic resilience.</p><h2><strong>Materiality Across Industries</strong></h2><p>Critical minerals are not confined to mining companies, but sit on balance sheets across sectors:</p><ul><li><p><strong>Automotive: </strong>Raw critical mineral content, including copper, can represent 10-20% of an EV’s cost before value addition. Price volatility here directly affects margin stability.</p></li><li><p><strong>Data Centres: </strong>AI usage will trigger the creation of massive new data centre capacity. Copper and aluminium are embedded across transformers, busbars, PCBs and cooling systems. Meanwhile, gallium and germanium enable energy efficiency and miniaturisation.</p></li><li><p><strong>Construction and Infrastructure: </strong>Most large projects hinge on copper wiring, aluminium structures, and coatings such as titanium dioxide. Cost escalations in these materials can significantly affect project budgets.</p></li><li><p><strong>Aerospace and Defence: </strong>Airplanes contain substantial volumes of titanium and specialty alloys, and geopolitical disruption is forcing backward supply-chain integration of these materials.</p></li><li><p><strong>Solar and Energy: </strong>Silver prices have turned volatile owing to strong industrial demand from the solar, battery and electronics segments.</p></li></ul><p>Collectively, critical minerals represent an estimated trillion-dollar materials base globally. Copper alone accounts for roughly half of that value. Electrification ensures that copper demand will remain central to modernisation across emerging markets. No sector is insulated.</p><h2><strong>Supercycle or Speculation?</strong></h2><p>Historically, real commodity prices trend downward over time as productivity improves. However, structural shocks regularly give rise to supercycles. Over the past century, four major supercycles have played out, coinciding with WW1, post-WW2 reconstruction, the oil shocks of the 1970s and the rise of China in the 2000s. Several factors suggest the possibility that another supercycle, driven by electrification, AI infrastructure and supply chain weaponisation, may now be underway:</p><ul><li><p>Declining ore grades, which increases extraction complexity.</p></li><li><p>Any new mines will require 10-15 years from discovery to production.</p></li><li><p>Water stress is affecting the efficiency of lithium extraction.</p></li><li><p>Tailings volumes are expanding as ore concentrations decline.</p></li><li><p>Environmental and humanitarian scrutiny are limiting mining and exploration.</p></li></ul><p>These factors imply volatility underpinned by structural tightness. For budgeting cycles, copper’s range matters. Minor analytical revisions can trigger sharp price movements. For CFOs, hedging strategies and sensitivity modelling become essential.</p><h2><strong>Regulation and Circularity</strong></h2><p>Regulation is expanding alongside demand. In India, critical minerals are under Central oversight, and extended producer responsibility frameworks already apply to batteries. Discussions are underway to extend EPR to non-ferrous metals and potentially across the entire critical mineral list.</p><p>Such shifts would impose collection, recycling and reporting obligations across industries. Recycling capacity itself is constrained by collection realities. Government estimates of end-of-life volumes often exceed ground availability due to extended product lifecycles and informal sector dynamics. Organised recyclers face cost pressures relative to unorganised players. Nevertheless, circularity is becoming a strategic lever. Companies may need to invest directly in recycling capacity or secure partnerships to manage future compliance and resource access.</p><h2><strong>The CXO Lens</strong></h2><p>The strategic response begins with quantification. First, companies must map critical minerals beyond tier-1 suppliers. Exposure often sits at tier-3 or tier-4, embedded within alloys or subcomponents. Second, financial sensitivity must be modelled. <em>(What is the EBITDA impact if copper moves from $12 to $15/kg? What is exposure to silver or cobalt spikes?)</em> Third, strategic levers must be evaluated, including: backward integration into refining or recycling; stockpiling critical inputs; supplier diversification; long-term offtake agreements; and investments in substitution, wherever feasible. <em>(Here, global precedents offer some guidance: Aerospace firms have integrated upstream to secure titanium supply; technology companies have invested in rare earth mining to protect component access.)</em> Finally, boards must treat materials risk as quantifiable. Critical minerals should shift from sustainability narratives to capital allocation frameworks.</p>
