Importing Every Gram, Sitting on Unmined Blocks: Why India's Critical-Mineral Problem Starts at Home

Squatting Is a Pricing Problem Before It Is a Compliance Problem Start with the

figure everyone quotes: India is 100% import-dependent for lithium, nickel, cobalt and rare earths. Every EV battery built in India depends on refined inputs shipped from somewhere else, often from supply chains that China dominates. Against that background, the Mines Secretary's complaint about "squatting" looks almost absurd. Why would anyone win an Indian mineral block and then leave it unworked?

Who squats and why it pays For the company holding the block, squatting is a rational choice.

A mining lease is a real option. The holder has the right, but not the obligation, to extract at a future date. When a company wins a critical-mineral block at auction, it has paid for that option. Once the lease is signed, it has two choices:

• Mine now: commit capital, hire, build infrastructure and sell at today's prices.
• Hold: pay the relatively small cost of keeping the lease and wait, betting that prices rise or that the block can be sold on at a premium. When the expected rise in the block's value exceeds the cost of holding it, waiting pays. Critical minerals, where demand forecasts are tied to EV and energy-storage growth, are exactly where that expectation is strongest. This is why Chandra described squatting as "centred on speculation." The lessee is not breaking a rule for no reason. It is responding to a price signal.

Who loses when blocks sit idle The costs are spread thinly, but they are real.

• State governments lose royalty and auction-premium income from blocks that produce nothing.
• Mining-district workers, often in tribal and forest regions, lose the jobs that operations would have created.
• Downstream processors, including the planned nickel park in Odisha and the lithium park in Maharashtra, lose the domestic feedstock that would make those parks viable instead of wholly import-reliant.
• The country stays exposed to supply shocks, because every idle block means another tonne that has to be imported. Those losses are exactly why the scheme matters. The new processing scheme and KABIL's overseas assets (Argentina and possibly Mali) are the right ideas. But processing parks that run entirely on imported ore replace dependence on refined imports with dependence on raw imports. Domestic mines producing on schedule are what turn processing capacity into real resilience.

The fix has to change the incentive The MMDR Act already provides for leases to lapse when mining does not begin within the set period.

Squatting persists because holding is still cheap enough to be worth it. The lasting fix is to make idle holding more expensive than producing: rising dead rent over time, auction terms tied to production milestones and credible, timely lapse and re-auction.

Appeals to industry at an AGM will not change that calculation. For the exam, critical-mineral questions reward candidates who link supply security to domestic incentives, not just to overseas deals. Import dependence is partly a failure of India's own leasing incentives, not just a lack of deposits.