Context

• In his Independence Day address, Prime Minister Narendra Modi exhorted the country to pursue aatmanirbhar bharta in energy by focusing on clean energy technologies. Securing access to key critical minerals such as lithium, cobalt, nickel and rare earth metals is critical for building resilient and indigenous supply chains for clean energy technologies.

Background 

• Concerns over the pricing and availability of oil and gas in the wake of the Ukraine crisis continue to fuel global policy debates on energy security. However, the fragility of clean energy supply chains obscures pathways for countries to reduce dependence on fossil fuel.
• Imported inflationary pressures through exposure to volatile oil and gas markets also pose risks to macroeconomic growth and stability, particularly for India, import ­dependent for around 85% of its oil and half of its gas needs.

What are Critical Minerals?

• Critical minerals are elements that are the building blocks of essential modern-day technologies, and are at risk of supply chain disruptions.
• These minerals are now used everywhere from making mobile phones, computers to batteries, electric vehicles and green technologies like solar panels and wind turbines.
• Based on their individual needs and strategic considerations, different countries create their own lists.
• However, such lists mostly include graphite, lithium, cobalt, rare earths and silicon which is a key mineral for making computer chips, solar panels and batteries.
• Aerospace, communications and defence industries also rely on several such minerals as they are used in manufacturing fighter jets, drones, radio sets and other critical equipment.

Why is this resource critical?

• As countries around the world scale up their transition towards clean energy and digital economy, these critical resources are key to the ecosystem that fuels this change.
• Any supply shock can severely imperil the economy and strategic autonomy of a country over-dependent on others to procure critical minerals.
• But these supply risks exist due to rare availability, growing demand and complex processing value chain.
• Many times the complex supply chain can be disrupted by hostile regimes, or due to politically unstable regions.
• They are critical as the world is fast shifting from a fossil fuel-intensive to a mineral-intensive energy system.

What are Rare Earth Metals?

• The rare earth elements (REE) are a set of seventeen metallic elements. These include the fifteen lanthanides on the periodic table plus scandium and yttrium.
• Rare earth elements are an essential part of many high-tech devices.
• They have a wide range of applications, especially high-tech consumer products, such as cellular telephones, computer hard drives, electric and hybrid vehicles, and flat-screen monitors and televisions.
• Significant defense applications include electronic displays, guidance systems, lasers, and radar and sonar systems.
• Rare earth minerals, with names like neodymium, praseodymium, and dysprosium, are crucial to the manufacture of magnets used in industries of the future, such as wind turbines and electric cars.

Applications of REMs in various fields:

• Electronics: Television screens, computers, cell phones, silicon chips, monitor displays, long-life rechargeable batteries, camera lenses, light-emitting diodes (LEDs), compact fluorescent lamps (CFLs), baggage scanners, marine propulsion systems.
• Defense Sector: Rare earth elements play an essential role in our national defense. The military uses night-vision goggles, precision-guided weapons, communications equipment, GPS equipment, batteries, and other defense electronics. These give the United States military an enormous advantage. Rare earth metals are key ingredients for making the very hard alloys used in armored vehicles and projectiles that shatter upon impact.
• Renewable Energy: Solar panels, Hybrid automobiles, wind turbines, next-generation rechargeable batteries, bio-fuel catalysts.
• Manufacturing: High strength magnets, metal alloys, stress gauges, ceramic pigments, colorants in glassware, chemical oxidizing agent, polishing powders, plastics creation, as additives for strengthening other metals, automotive catalytic converters
• Medical Science: Portable x-ray machines, x-ray tubes, magnetic resonance imagery (MRI) contrast agents, nuclear medicine imaging, cancer treatment applications, and for genetic screening tests, medical and dental lasers.
• Technology: Lasers, optical glass, fiber optics, masers, radar detection devices, nuclear fuel rods, mercury-vapor lamps, highly reflective glass, computer memory, nuclear batteries, high-temperature superconductors.

DO YOU KNOW?

Metals such as cadmium, lead are often used in manufacturing plastic and over time can enter coastal waters. These are acutely harmful for coastal wildlife and humans.Different kinds of plastic releases different kinds of metals  that may release when exposed to water and UV lights.

What are the challenges in accessing Critical minerals?

• Deposits in geopolitically sensitive regions: Reserves are often concentrated in regions that are geopolitically sensitive or fare poorly from an ease of doing business perspective.
• Controlled production:  A portion of existing production is controlled by geostrategic competitors. For example, China wields considerable influence in cobalt mining in the Democratic Republic of Congo through direct equity investments and its Belt and Road Initiative.
• Agreements in advance from outside: Future mine production is often tied up in off take agreements, in advance, by buyers from other countries to cater to upcoming demand.

A step taken by Indian government for sourcing strategic minerals

• For sourcing of strategic minerals, the Indian government established Khanij Bidesh  India Limited (KABIL) in 2019 with the mandate to secure mineral supply for the domestic market.

What is Khanij Bidesh India Limited (KABIL)?

• Joint venture: A joint venture company namely Khanij Bidesh India Ltd. (KABIL)  set up with the participation of three Central Public Sector Enterprises namely, National Aluminium Company Ltd.(NALCO), Hindustan Copper Ltd.(HCL) and Mineral Exploration Company Ltd. (MECL).
• Objective: The objective of constituting KABIL is to ensure a consistent supply of critical and strategic minerals to Indian domestic market. While KABIL would ensure mineral security of the Nation, it would also help in realizing the overall objective of import substitution.

Suggestions based on Council on energy environment and water (CEEW) to achieve the objective of KABIL

• Mapping out the domestic requirement: Figure out the mineral requirements of the domestic industry. This could best be accomplished by a task force which includes the ministries of power, new and renewable energy, heavy industry, and science and technology.
• Clear road map for indigenous manufacturing: Five­ year road maps with clear targets for deployment and indigenous manufacturing across clean energy applications would provide visibility to domestic investors. Assess the technology mix that would support this deployment. On this basis, determine the quantities of minerals necessary to support indigenous manufacturing.

• Better coordination between different stakeholders: Coordinate with the domestic industry to determine where strategic interventions by the government would be necessary for the purpose.KABIL could collaborate with industry to bolster its market intelligence capabilities for tracking global supply­ side developments.
• Preemptive agreements through KABIL for reliable supply: If conducive investment opportunities don’t exist KABIL should pre­emptively sign off take agreements with global  mineral suppliers to secure future production. It could aggregate reliable supply of minerals for domestic requirements  and sign back ­to­ back sales agreements with the domestic industry .Such large scale centralised  national procurement could be done at preferential terms.
• Joint Investment In mining assets to mitigate investment risks: The government should jointly invest in mining assets with geostrategic partners. KABIL should make equity investments in mining jurisdictions that private sector investors may deem too risky. It should leverage government­ to­ government partnerships to mitigate investment risks. This could be done through joint investments with sovereign entities from geostrategic partners or private sector entities with expertise in specific geographies.
• Finding the alternatives: Technologies such as sodium ­ion batteries could reduce requirements for sourcing minerals from beyond India’s borders.  It could also propose co­ development of such technologies with geostrategic partners.
• Developing policies on sustainable urban mining and recycling: Develop policies on urban mining aimed at recycling mineral inputs from deployments that have completed their useful life. These could help further reduce dependence on international sourcing.

Conclusion

• Besides Ukraine, other potential geopolitical flash points also exist against a backdrop of dwindling multilateral cooperation. India must act immediately and decisively to mitigate  these risks  to its energy security.

Mains Question

Q.What are critical minerals? Why the critical minerals are so important? What steps India can take to achieve the objective of Atmanirbhar Bharat in domestic mineral supply and thereby mitigating energy security risks?

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