The Biggest Roadblock to India’s Net-Zero Goal

Why in News?

• With global efforts to decarbonise and an increasing demand for critical minerals, governments throughout the world are taking strategic steps to ensure access to these essential resources.
• The government of India has also made amendments to mining laws to facilitate private sector participation in the extraction and processing of the critical minerals.

Significant Measures Taken by the Indian Government

• Identification of Critical Minerals
  • In July 2023, India took the pivotal step of identifying a list of 30 critical minerals, distinct from rare earths.
  • Each chosen based on criteria such as disruption potential, substitutability, cross-cutting usage, import reliance, and recycling rates.
  • The identified minerals are geographically concentrated in states and union territories, including Bihar, Gujarat, Jharkhand, Odisha, Tamil Nadu, Uttar Pradesh, Chhattisgarh, and Jammu and Kashmir.
• Amendment of Existing Mining Laws
  • A subsequent move in November 2023 involved the amendment of existing mining laws to enable private sector involvement in the auction of 20 blocks containing critical minerals and rare earths.
  • This marks a significant shift in India's mineral sector, opening opportunities for private enterprises to contribute to the extraction and processing of these crucial resources.

Significance of Critical Minerals

• Decarbonisation and Clean Energy Technologies
  • While decarbonisation efforts are a primary driver for the identification of critical minerals, their crucial role in clean energy technologies cannot be overstated.
  • Solar PV plants, wind farms, and electric vehicles, integral components of clean energy transitions, heavily rely on critical minerals for their production.
  • The International Energy Agency (IEA) estimates that over 40% of copper and rare earths, 60-70% of nickel, and cobalt, and 90% of lithium demand will be driven by clean energy technologies to meet Paris Agreement targets.
• Transportation Sector
  • The shift towards electric vehicles (EVs) is a key component of sustainable transportation.
  • Critical minerals, especially lithium, cobalt, and nickel, are essential components in the manufacturing of batteries for EVs.
  • The demand for these minerals is expected to surge as countries worldwide transition from traditional internal combustion engine vehicles to electric alternatives.
• Consumer Electronics
  • Critical minerals play a crucial role in the production of consumer electronics, including smartphones, laptops, and tablets.
  • The miniaturization and enhanced performance of electronic devices are made possible using specific rare earth elements and other critical minerals in their components.
• Construction Industry
  • The construction industry relies on critical minerals for various applications, including the production of high-strength alloys, cement, and other building materials.
  • These minerals contribute to the durability and efficiency of construction materials, ensuring the sustainability of infrastructure projects.
• Defence and National Security
  • Critical minerals are indispensable in the defence sector to produce advanced weaponry, communication systems, and other military technologies.
  • Ensuring a stable and secure supply of these minerals is crucial for maintaining national security and technological superiority.
• Fertilisers and Agriculture
  • Certain critical minerals, such as phosphorus and potassium, are essential components in fertilisers used in agriculture.
  • They play a vital role in enhancing crop yields and ensuring global food security.
• Magnets for Industries
  • The manufacturing of magnets, widely used in various industries, relies on critical minerals like neodymium, praseodymium, and dysprosium.
  • These magnets are integral components in technologies ranging from electric motors to medical devices.

The Geographical Concentration of Critical Minerals and Its Global Implications

• Economic Dynamics
  • The concentration of critical mineral resources in a few countries, such as Australia, China, the Democratic Republic of Congo (DRC), Indonesia, and Chile, creates economic dependencies.
  • Nations possessing substantial reserves hold a significant advantage in terms of revenue generation, job creation, and overall economic development, potentially leading to global economic imbalances.
• Geopolitical Power Play
  • The strategic importance of critical minerals transforms their extraction and processing into geopolitical tools.Nations controlling these resources gain influence on the global stage.
  • China, in particular, has utilised its dominance in rare earths to exert political leverage, as seen in restrictions on exports to countries like the US and Japan.
  • China's dominant position in critical minerals, coupled with its monopolised processing capacity, has geopolitical implications.
  • The nation has used its rare earths monopoly as a tool for political leverage, restricting exports and related technologies.
  • This has prompted the formation of international collaborations, such as the US-led Minerals Security Partnership (MSP), aiming to secure the critical minerals supply chain and reduce dependence on authoritarian states.
• Supply Chain Vulnerability
  • The concentration of critical mineral resources in specific regions raises concerns about the vulnerability of global supply chains.
  • Political unrest, trade disputes, or other geopolitical events in major producing nations can disrupt the supply of critical minerals, impacting industries dependent on them.

India’s Goals and Challenges in Securing Critical Minerals

• Decarbonisation Goals and Energy Transition
  • India has set ambitious targets for decarbonisation, aiming to become net-zero by 2070 and establish 500 GW of non-fossil fuel power generation capacity by 2030.
  • The transition to renewable energy sources, electric vehicles, and sustainable practices underscores India's commitment to mitigating climate change.
• Heavy Dependence on Imports
  • Despite possessing identified reserves of critical minerals, India currently relies heavily on imports to meet its demand for these resources.
  • The import dependency poses a significant challenge, exposing the nation to global market fluctuations, supply chain disruptions, and potential geopolitical tensions.
• Strategic Agreements for Exploration
  • Recognising the need to reduce import reliance, India has entered into strategic agreements, such as the one with Australia, to jointly explore for critical minerals like lithium and cobalt.
  • Collaborations with resource-rich nations aim to secure access to raw materials and diversify sources beyond traditional suppliers.
• Lack of Domestic Processing Capacity
  • Identifying critical minerals is just the first step; the subsequent processing and manufacturing of final products necessitate advanced technology and infrastructure.
  • India faces a challenge in building domestic processing capacity, which contributes to a prolonged gestation period before achieving self-reliance.
  • Besides raw material availability, gaining access to advanced technology for mineral processing and manufacturing remains a critical aspect.
  • Technology transfer and collaborative ventures with countries possessing processing expertise become vital for India's success in this domain.
• Participation in International Collaborations
  • India's involvement in the US-led MSP demonstrates its commitment to building strategic collaborations for securing the critical minerals supply chain.
  • The MSP includes countries with deposits of critical minerals, as well as those with access to processing technology, fostering a collective effort to overcome challenges.

Conclusion

• There is a growing concern that the lack of access to critical minerals may emerge as a significant roadblock to India's ambitious march towards decarbonisation.
• The success of decarbonisation goals is contingent on overcoming challenges related to import dependency, processing capacity, and technological advancements.

Q1) What are critical minerals, and why are they important in today's context?

Critical minerals are rare elements essential for modern technologies, such as smartphones and electric vehicles. Their scarcity and strategic importance make them crucial for economic and national security.

Q2) How does the global demand for critical minerals impact geopolitical dynamics?

The increasing demand for critical minerals fuels geopolitical competition, as nations seek to secure reliable access. Control over these resources can influence global power dynamics and trade relationships.

Source: The Indian Express