GS Paper III
News Excerpt:
India signed new agreements and updated older ones with a dozen African countries to secure critical minerals.
- The government's initiative to secure critical minerals is vital for India's energy transformation goals.
More about News
- Earlier this year, the Indian government signed an agreement with Argentina to acquire five lithium brine blocks for exploration and development in that country.
- The lithium exploration deal with Argentina is a step towards securing lithium supplies needed for electric vehicle (EV) batteries.
- Geological Survey of India (GSI) last year discovered inferred lithium reserves of 5.9 million tonnes in J&K because of fresh exploration.
Demand for Energy
- During the current year 2023-24, peak demand increased to 250 GW which is an increment of 12.7% compared to previous year.
- In 2030, India’s peak demand will be 366 GW from the current level of 240 GW.
Minerals Required
- Lithium is the most important component used in the current generation of EVs, apart from powering all mobile phones and tablets.
- Solar panels and EV batteries need minerals like lithium, cobalt, nickel, cadmium, germanium, niobium, beryllium, vanadium, and many others.
- The other minerals are required in lower quantities, but each of them is a critical component in the energy transition journey.
China’s Dominance
- China is the leader in most critical minerals. It has spent decades building up relationships with mineral-rich countries in Africa and Latin America.
- Chinese companies have secured mining rights in mineral-rich but economically poor nations — while the US, Europe, and even Australia have been tardy to move on these opportunities.
- China has also built huge capacities for the processing and refining of these minerals — which means that almost all these critical mineral ores, from lithium to cobalt to rare earths — go to China for processing after being mined in different geographies.
Challenges and Requirements:
- At present India is dependent on imports, mainly from China, for critical minerals.
- Having multiple sources of critical minerals is always better. For this India should secure mining leases abroad.
Multi pronged strategy for becoming independent of China for critical mineral supplies:
- Exploration and geological studies should be done to see if India has reserves of one or more of these critical minerals. There has not been enough exploration so far because the demand for these minerals was low.
- Securing mining leases abroad for critical minerals should be the strategy to garner future security of minerals.
- The new government needs to give strong incentives to start building refining and processing capacities within India for these minerals.
Way Forward:
- The government asked the Geological Survey of India (GSI) to accelerate exploration of India’s land mass of 3.2 lakh sq km, and also use new data sources as well as new technologies.
- White Hydrogen deposits are not being actively explored and yet they may be present within India’s geographical borders.
- Government also attracting private miners — both domestic as well as global — to take up critical mineral exploration blocks within India.
- The government needs to analyze why auctions often do not generate enough interest. Policy changes may be needed to attract big players — with both the Centre and state governments working together on clearances before any auction takes place, and also looking at royalty payments.
- The government needs to give strong incentives to start building refining and processing capacities within India for these minerals.
