Can Critical Minerals Help India Reach Its Net Zero Emissions Goal?

Context: 

This editorial is based on the news “The biggest roadblock to India’s net-zero goal” which was published in the Indian Express. Critical Minerals are significant in achieving the Net-zero goal of India.

About Critical Minerals

• Definition: No universal definition as countries identify critical minerals based on their own criteria. 
• Example- US has identified 50 minerals while Japan has identified 31.
• India and Critical Minerals:  The Indian Government has identified a list of 30 critical minerals (excluding rare earths) in July 2023.
  • The Amendments to mining laws in November 2023 allowed private sector participation in the auction of 20 blocks of critical minerals/rare earths minerals.
• States/UTs in possession of Critical Minerals: Bihar, Gujarat, Jharkhand, Odisha, Tamil Nadu, Uttar Pradesh, Chhattisgarh, and Jammu and Kashmir.

Issues

• Global Concentration of Resources: 

  • Majority of critical minerals concentrated in a few countries.
    • Australia has 55 per cent of lithium reserves, China has 60 percent of the rare earths, Democratic Republic of Congo (DRC) has 75 percent of cobalt, Indonesia has 35 percent of nickel, Chile has 30 percent of copper reserves.

• China Factor: 

• • Monopoly in processing of minerals: China monopolises processing capacity for critical minerals like nickel, lithium, cobalt, and rare earths.
  • Example- Mountain Pass Mine, a US-based rare earth mining company, exports a significant portion of its production to China due to the lack of domestic processing capacity. The reliance on Chinese processing raises supply chain vulnerability concerns and highlights dependence on a single country for critical minerals and rare earths minerals.
  • Settle Political Scores: China, incidentally, has been using its monopoly position on rare earths to settle political scores with countries like the US and Japan by restricting their exports and also the related technology.
  • Investments with other countries: Chinese companies have made investments in Australia, Chile, Indonesia and the DRC, among others, to source those minerals which it is not endowed with sufficiently. 

Government Initiatives

• Minerals Security Partnership (MSP): 

  • It is a US-led Minerals Security Partnership (MSP). India is also a member of MSP. 
    • The aim of the MSP is to bolster the critical minerals supply chain.
    • It  includes countries like Australia, Canada, Sweden and Norway, which have deposits of critical minerals, and also countries like Japan and South Korea which have access to processing technology.
    • MSP does not include countries like Chile, DRC, Indonesia etc. (which are rich in certain critical minerals), raising concerns about its effectiveness.

• India’s Decarbonisation Plans: 

• • India aims for 500 GW non-fossil fuel power capacity by 2030 and net-zero by 2070.
    • As of now, India is completely dependent on imports for most of the critical minerals. India has signed an agreement with Australia to jointly explore for lithium and cobalt assets in Australia.

Challenges

• Lack of access to critical minerals poses a significant roadblock to India’s decarbonization goals.
• Need for processing, manufacturing, and technology access; gestation period estimated at 15 years or more.

Conclusion

There is a big fear that lack of access to critical minerals may be the biggest roadblock to India’s march towards decarbonisation.

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