Dr. Vivek Kumar Singh & Pankaj Kumar Singh, 05 Aug 2024
India's ambitious goals to transition to a clean energy future and meet its climate commitments by 2070 hinge on securing a stable supply of critical minerals. These minerals are essential for manufacturing clean energy technologies such as solar panels, wind turbines, and battery energy storage systems (BESS), as well as for electric vehicles (EVs).
Rising Demand and Supply Challenges
According to the Centre for Social and Economic Progress (CSEP, 2024), the demand for critical minerals is set to increase dramatically. By fiscal year 2025, India will require approximately:
By 2047, these requirements are projected to surge significantly:
India's domestic supply of bulk minerals like iron ore, limestone, and bauxite is sufficient. However, the country faces a shortfall in non-bulk critical minerals such as lithium, cobalt, nickel, and graphite, which are currently imported from a small group of countries. This presents a significant challenge as India strives to meet its clean energy goals.
Strategic Imperatives
Enhancing Domestic Production and Recycling
To address domestic scarcity and reduce import dependence, India must enhance domestic production and processing of critical minerals. Developing end-of-life ecosystems for recovery and recycling is crucial. Improved recycling rates could save approximately 1,500 kilotonnes of critical metals over the next two decades. Establishing urban mining initiatives to recover minerals from electronic waste is also vital.
Institutional Capacity and Policy Frameworks
Developing robust policy-regulatory frameworks is essential to support domestic production, processing, and recycling of critical minerals. These frameworks should address investment needs, technical and operational challenges, and socio-environmental impacts.
In July 2023, the Indian government identified 30 minerals as critical by amending the Mines and Minerals (Development and Regulation) Act, 1957, through the MMDR Amendment Act, 2023. This amendment empowers the Central Government to auction blocks of these minerals. The 30 critical minerals identified are:
Socio-Environmental Considerations
Mitigating socio-environmental impacts of mineral mining is essential to maintain the trust of local communities, avoid project delays, and manage costs effectively. Ensuring environmentally sustainable mining practices is crucial to minimize the ecological footprint of mineral extraction and processing. Building and maintaining trust with local communities involves addressing socio-environmental concerns, providing fair compensation, and ensuring transparent communication. A social license to operate is important for resource development.
Learning from Global Leaders
China dominates the midstream and downstream segments of the critical mineral value chains, establishing itself as a global leader. For India, replicating this success involves developing low-cost economies of scale in mineral processing and manufacturing, and fostering innovation. Establishing low-cost economies of scale in mineral processing and manufacturing and promoting innovation are important for domestic clean energy technology manufacturing.
Building Strategic Partnerships
India can build strategic partnerships around critical minerals by increasing investments, enhancing diversification, addressing socio-environmental concerns, and leveraging these alliances to secure supplies. To reduce dependency on any single country, India must diversify its sources of critical minerals. This can be achieved through bilateral agreements and partnerships with resource-rich nations. Engaging in strategic alliances and joint ventures with other countries to secure a stable supply of critical minerals is crucial. These partnerships should focus on increasing investments, addressing socio-environmental concerns, and enhancing technological cooperation.
Sector-Specific Insights
Solar Photovoltaic (PV) Technologies
Extending the lifespan of solar PV projects from 20 to 25 years could reduce mineral demand by up to 30% by 2047. This can be achieved through technological innovations and improved maintenance practices.
Wind Turbines
Wind turbines require significant amounts of rare earth elements (REEs) for manufacturing permanent magnets. Developing sustainable and ethical sourcing strategies for REEs is critical to support the growth of wind energy.
Battery Energy Storage Systems (BESS)
BESS is a cornerstone of India's clean energy transition. Ensuring a steady supply of lithium, cobalt, nickel, and graphite for battery manufacturing is essential. Research and development (R&D) into alternative battery technologies that require fewer critical minerals can also help mitigate supply risks.
Policy Recommendations
National Critical Minerals Strategy
Formulating a comprehensive national strategy that outlines the roadmap for securing critical minerals is essential. This strategy should encompass exploration, production, recycling, and international collaboration.
Investment in R&D
Investing in R&D to develop advanced extraction, processing, and recycling technologies is crucial. This includes exploring alternative materials and improving the efficiency of existing technologies.
Economic Incentives
Providing economic incentives such as tax breaks, subsidies, and grants to encourage domestic production and processing of critical minerals can attract investments and spur growth in this sector.
Education and Workforce Development
Developing specialized training programs and educational initiatives to build a skilled workforce capable of supporting the critical minerals sector is vital. This includes training in advanced mining techniques, processing technologies, and environmental management.
Ensuring a stable supply of critical minerals is fundamental to India's clean energy transition and broader climate objectives. By enhancing domestic production, improving recycling rates, developing robust policy frameworks, and building strategic partnerships, India can secure the critical minerals needed to achieve its climate goals and drive sustainable economic growth.
India's path to a clean energy future is fraught with challenges, but also immense opportunities. The proactive steps taken by the government to identify and prioritize critical minerals, coupled with strategic planning and international cooperation, will be key to navigating this complex landscape. By leveraging its strengths and addressing its weaknesses, India can not only meet its climate commitments but also emerge as a global leader in the clean energy revolution.