Vol 1, July 2023 | Thinking critical

Mere days after notifying the critical mineral policy, India’s Union Cabinet of ministers reportedly approved amendments to the Mines and Minerals (Development and Regulation) Act to allow the commercial mining of six minerals. Photo: EARTHWORKS/Flickr.

The success of the country’s search for critical minerals hinges on more than just its navigation of global geopolitics. Read more

Mere days after notifying the critical mineral policy, India’s Union Cabinet of ministers reportedly approved amendments to the Mines and Minerals (Development and Regulation) Act to allow the commercial mining of six minerals. Photo: EARTHWORKS/Flickr.

Digging into India’s critical minerals dash

In the first installment of a three-part series that explores India’s efforts to bolster its position in the critical minerals supply chains, CarbonCopy finds that its success depends on more than just the country’s navigation of global geopolitics

Read the second and third part here

Developments in the past few weeks have reinforced the buzz around critical minerals in India’s policy and trade circles. First, India was inducted into the US-led Mineral Security Partnership (MSP). Next, the Indian Ministry of Mines released the Critical Minerals for India report listing 30 minerals vital for India’s economic growth. Finally, as this report was being prepped for publication, news emerged that India’s Union Cabinet had approved commercial mining for five of these minerals—lithium, beryllium, titanium, niobium, tantalum and zirconium.

The significance of these minerals for emergent technologies and industries has been known for decades, so why is it only now that the Indian government appears to be waking up to this fact? And what are the odds that its enthusiasm to integrate with global supply chains will translate to reality?

China’s mineral monopoly 

Answers to these begin with an understanding of how supply chains for many of these minerals and their derivatives are currently controlled—and the power structures these supply chains represent. 

In the early pages of the bestselling book Cobalt Red, author Siddharth Kara describes a modern geopolitical quandary. Half of the world’s reserves of cobalt lie in a 400 sqkm crescent running from the Democratic Republic of the Congo (DRC) to northern Zambia, writes Kara in his book about unfettered mining of the mineral in the country.

Much of the mining here—from the depots that collect cobalt ore from miners to the units that process it—is dominated by the Chinese. “As of my last ground count in November 2021, there were nineteen major industrial copper-cobalt mining complexes operating in (Congo’s) Haut-Katanga and Lualala provinces, fifteen of which were owned or financed by Chinese mining companies,” writes Kara.

That is just the start. Semi-processed cobalt from these mines is exported to commercial-grade refiners, most of whom are in China. “In 2021, China produced 75 percent of the world’s refined cobalt,” he writes. “The single largest refiner was Huayou Cobalt with a market share of 22 percent. Huayou owns Congo Dongfang Mining, one of the largest copper-cobalt companies operating in the DRC.”

Cobalt is far from an exception. Over the past 20 years, China has methodically amassed mining concessions for the critical minerals necessary for the energy transition as well as built expertise in processing raw ores into refined metals. 

IEA estimates that China’s share of refining is around 50-70% for lithium and cobalt, 35% for nickel, and 95% for manganese. The nation is also responsible for nearly 90% of rare earth elements, which are essential raw materials for permanent magnets used in wind turbines and EV motors, as well as 100% of graphite, the anode material in EV batteries.

As we know, the country’s choke-hold over the global energy transition doesn’t end there. Once refined, cobalt and lithium are merged with other metals to make batteries. At this time, with a 35% share, the largest lithium-ion (Li-Ion) battery manufacturer in the world is China’s CATL. Earlier this year, BYD overtook LG to claim, with a 16% market share, the second slot. 

Nor is that all. Five of the top 10 battery makers today are Chinese. Between them, the country’s market share in rechargeable batteries stands at 75%. That is three out of every four batteries powering the global energy transition.

A problem for India

It barely needs to be said that China’s hegemony over critical minerals is not optimal for India. The country has ambitious renewable energy targets. It wants renewables’ share in the grid to rise to 500 GW by 2030. It also wants 30% of private cars, 70% of commercial vehicles and 80% of two- and three-wheelers to go electric by 2030. 

Between mobility, consumer electronics and grid storage, Niti Aayog pegs India’s potential need for battery storage at 600 GWh. Other estimates are even higher. According to New Delhi-based Council on Energy, Environment and Water (CEEW), India will need as much as 903 GWh to decarbonise just its mobility and power sectors.

Failure to manufacture these batteries locally will result in huge import dependence—if not on China then on global commodity traders like Glencore and Trafigura that dominate trade in critical minerals. 

This is a problem. As Covid-19 showed, over-reliance on any country/company for critical supplies can result in supply disruptions. Compounding matters, relations between China and India are souring and, as history keeps telling us, control over energy is a powerful geopolitical weapon.

Racing to catch up

To create an indigenous renewables value chain, India needs to secure supplies of critical minerals, no less than 30 elements, according to the newly released critical mineral policy. The catch is: India is self-sufficient in few of these.

The recently released Report of the Committee on Identification of Critical Minerals — which maps mineral requirements for a clutch of sectors including renewables, defence, electronics, telecommunications and transportation — lists 13 minerals for which India has no production capacity and relies entirely on imports. These are lithium, cobalt, nickel, vanadium, niobium, germanium, indium, rhenium, beryllium, bismuth, tantalum, selenium, tellurium, strontium and tungsten. Others—like antimony, titanium and copper—are found in India but known reserves are lower than the volumes needed. 

As a working paper by New Delhi-based Centre for Social and Economic Progress (CSEP) notes, “India doesn’t have reserves of nickel, cobalt, molybdenum, rare earths, neodymium and indium, and the needs for copper and silver are higher than the country’s current reserves.”

Given this backdrop, there is rising clamour that India must secure its critical mineral supplies. Mere days after notifying the critical mineral policy, India’s Union Cabinet of ministers reportedly approved amendments to the Mines and Minerals (Development and Regulation) Act to allow the commercial mining of six minerals. Five of these—lithium, beryllium, titanium, niobium, and tantalum—are among those whose domestic production capacity is currently non-existent or significantly below requirement. The amendment reportedly goes even further, allowing for companies to suggest areas for exploration and extraction—a stark departure from established norms where the government identifies and auctions mineral blocks (as is the case with commercial coal mining). The amendment is expected to be tabled in the Parliament during the Monsoon Session, which is slated to commence on July 20.

What are the odds?

India’s keenness to enter the critical minerals fray has been evident for a few years now, and the recent flurry of developments have hardly materialised from thin air. 

In 2019, the country set up KABIL (Khanij Bidesh India Ltd). Like ONGC Videsh (OVL), which offsets India’s small domestic oil reserves by investing in oilfields elsewhere in the world, KABIL has to secure India’s supplies of strategic minerals through global investments. Its success, however, hinges on two factors.

The first is global geopolitics around critical minerals. Not only has India staged a belated entry into the critical minerals space—China began amassing critical mineral reserves from the early 2000s; and had begun developing its renewables industry by the end of that decade—India is also entering this arena at a time global critical mineral supply chains are seeing extraordinary competition. 

Global lithium ion capacity, to take one instance, is projected to spike from 1,000 GWh in 2021 to 5,500 GWh in 2030. That works out to a demand of 5,500,000 tonnes of lithium. To put that in perspective, global production of lithium stood at 84,000 tonnes in 2021. That is the geopolitical context in which KABIL has to operate. 

The second factor is equally consequential. Securing critical mineral supplies is not enough to insulate the country from supply risks. If Chinese EV firms reprise their country’s success in solar panels—or if Indian firms continue sourcing components from China as opposed to buying them from Indian manufacturers—the country’s dependence on Chinese supply chains will continue.

In other words, to meaningfully insulate itself, India has to develop its own EV value chain. How are these pieces coming together? 

The next installments in this series will attempt to answer this and paint a clear picture of India’s scramble for a place in the supply chains of tomorrow. Read the second and third part here.

Normal to above normal rainfall in most parts of central India and adjoining south peninsular and east India and some areas of northeast and northwest India is expected.

IMD predicts normal rainfall, but Indian monsoon skewed and anomalous so far

The Indian monsoon arrived on the coast of Kerala on June 8, more than a week later than normal and the southern part of the country received its lowest June rainfall in 122 years—88.6 mm—which was 45% less than the normal between 1971 and 2020. However, the monsoon has made quick progress and has now covered the entire country. While rainfall was 10% below average during June, in July it could be 100 to 106% of the long-period average. The IMD has forecast an average amount of rainfall for the entire four-month season, despite the formation of an El Nino weather pattern. Normal to above normal rainfall in most parts of central India and adjoining south peninsular and east India and some areas of northeast and northwest India is expected. Despite the promise of an abundant monsoon season, the progress so far has been a cause of concern as it has been marked by a litany of extreme weather events, including heatwaves, extremely severe cyclone Biparjoy, floods in Northeast India, flash floods and landslides in Himachal Pradesh and Uttarakhand, and torrential rains in Delhi.

Earth records hottest day third time in a week, worst yet to come

On July 3, the world’s average temperature climbed to its highest level since records began in 1979. According to data by US researchers, the global average air temperature was the highest ever recorded at 17.01°C based on various datasets they analysed. However, the record lasted only for a day as it was broken again on July 4 (17.18°C) and July 6 (17.23°C), deepening fears about the far-reaching effects taking place in Earth’s system because of the climate emergency. Scientists believe this is driven by the combination of El Niño and global warming, and the world may see even warmer days over the next few months. 

Climate change indicators: Orchids are blooming earlier than usual in northeast India

The blooming cycle of the foxtail orchid in Assam is traditionally associated with the Assamese new year in April, signifying the arrival of spring. But changing climatic conditions have resulted in premature flowering and wilting of the orchid species in March itself. Identified as one of the most climate change-vulnerable regions in the Indian Himalayan region, higher temperatures and lesser rainfall have already impacted Assam’s water resources, agriculture, forests, and unique biodiversity, including its rich orchid population of 411 recorded species, raising concerns about its survival and potential loss. 

. These minerals are primarily used in the electronics, spacetech and communications industries as well as making EV batteries.

Indian Cabinet allows commercial mining of lithium, 5 other minerals

The Indian Cabinet approved amendments to the Mines and Minerals (Development and Regulation) Act, which allow commercial mining of lithium and five more minerals—beryllium, titanium, niobium, tantalum and zirconium, sources told Moneycontrol. These minerals are primarily used in the electronics, spacetech and communications industries as well as making EV batteries. So far, existing laws have prohibited the mining of these minerals, and these industries have been dependent on imports. Lithium will play a major role in helping India achieve its net-zero by 2070 target as the country transitions to clean energy. 

Validity of CRZ clearances for infra projects extended from 7 to 10 years

Coastal zone clearances for infrastructure projects will now be valid for 10 years, according to a new notification by the Indian government. The previous current validity period is 7 years, according to a 2019 notification. Coastal regulatory zone (CRZ) clearance can also be transferred to another project proponent or be split amongst two or more proponents. The ministry provided no public notice for people to submit their suggestions or objections to this new notification. 

Centre appoints Justice Sheo Kumar Singh as acting chairperson of NGT

Justice Sheo Kumar Singh has been appointed as the acting chairperson of the National Green Tribunal (NGT) after the retirement of Justice Adarsh Kumar Goel. A notification issued by the Union ministry of environment, forest and climate change stated that Singh would be acting chairperson until an appointment is made to the post. Singh, who joined judicial services in 1984, was previously appointed Observer, Ram Janam Bhumi, Ayodhya, Faizabad by the Supreme Court, and had to oversee excavation work. 

According to the analysis in 2022, the average annual PM 2.5 level was 46.4 microgrammes in rural India almost the same as the urban level of 46.8 microgrammes.

PM 2.5 pollution in cities, villages almost the same: Study

A Climate Trends analysis of 2022 satellite-based data generated by IIT Delhi scientists revealed that the annual average of the most toxic air pollutant, ultrafine particulate matter (PM) 2.5, was as poor in rural India as urban India. This has put under scanner the Centre’s policy of only investing in selected urban areas of the country for controlling toxic air  According to the analysis in 2022, the average annual PM 2.5 level was 46.4 microgrammes in rural India almost the same as the urban level of 46.8 microgrammes. The national limit is 40 microgrammes. 

The report showed that the urban and rural levels of PM 2.5 in India since 2017 shows almost similar pollution concentration.  The National Clean Air Plan (NCAP), which was announced in 2019 till date, released around Rs9,000 crore mainly for 131 cities — called non-attainment ones — consistently going above the national air pollution limits. However, most rural areas do not have even any on-ground pollution measuring mechanism.

The report stated the NCAP was designed as a programme to address the high levels of air pollution across India’s urban centres. Air pollution is a transboundary problem that knows no borders. There is an urgent need to track pollution levels and develop policies for rural regions, as there is little difference in concentration levels between urban and rural areas. The study was covered widely in the media including in TOI and Down to Earth. 

Drop in air pollution during 2020 COVID 19 lockdowns slowed Himalayan meltdown: Study

According to a new study, a decrease in air pollution in India during the COVID-19 pandemic slowed the melting of snow in the Himalayas,  Lockdowns brought the business to a halt, particulate matter dropped that stopped over 27 million tonnes of snow and ice from melting compared to 2019, the report published in the journal PNAS Nexus showed. The researchers used satellite data to track the impact on snowmelt during the two-month nationwide lockdown in 2020. The study assessed that changes in Himalayan RFSLAPs (influence of human activities on radiative forcing on snow) is linked to the Indian lockdown. Differences between the RFSLAPs in 2020 and the average from 2017-2019 over the Tibetan Plateau  was calculated. 

NO2 can lead to premature death: Study 

Nitrogen dioxide (NO2) can lead to premature death from respiratory and circulatory illness, new research confirmed. NO2 pollution can also impact  people living with respiratory or cardiovascular diseases, stated the review commissioned by Health and Environment Alliance (HEAL). The European agency said NO2 exposure can lead to respiratory and circulatory premature death (from both short- and long-term exposure), to the development of asthma in children and adults, to bronchitis in children. The research suggested improving air quality indices to include information on health risks and vulnerable groups & alerts on NO2 peak pollution levels.

States and UTs fined about 80,000 crore so far on states for not disposing of sewage and garbage

The National Green Tribunal (NGT) fined about Rs80,000 crore on states and Union territories (UT) so far over non-compliance of sewage treatment and garbage disposal rules and for violating orders, Down to Earth reported. The NGT said there is a huge gap in the treatment of sewage and disposal of solid waste by states and UTs: 26,000 million litres per day (MLD) of liquid waste and 56,000 tonnes per day of solid waste are not being properly disposed of. Also, 180 million tonnes of legacy waste have not been disposed of by states. 

The highest fine was slapped on Tamil Nadu at Rs15,419.71 crore, followed by Maharashtra at Rs12,000 crore, Madhya Pradesh at Rs9,688 crore and Uttar Pradesh at Rs5,000 crore, the report said.

The company achieved loan disbursement of Rs 21,639 crore last financial year, a 34 per cent growth over the previous fiscal.

IREDA loans grew ‘highest-ever’ to 36% at ₹32,586 crore in 2022-23

Centre-run Indian Renewable Energy Agency (IREDA) sanctioned a ₹32,586 crore loan last financial year (2022-23), which grew 36.23% as compared to the previous fiscal year, the company said in a statement. The government agency under the Ministry of New & Renewable Energy (MNRE) accomplished its highest-ever annual loan sanction, loan disbursement, loan book, profit, and net worth, according to IRFEDA Chairman Pradip Kumar Das. The company achieved loan disbursement of ₹21,639 crore last financial year, a 34% growth over the previous fiscal. 

Off-shore wind energy: India likely to miss 37 GW by 2030 target? 

Analysts observing India’s off-shore wind energy sector said there is not much progress since the National Offshore Wind Energy Policy was first notified in 2015, Mongabay reported. The climate news portal said the government plans to bid out 37 GW equivalent of offshore wind projects by 2029-30, but there is a low probability of offshore wind projects being commissioned before 2030 as their development will take a minimum of 7-8 years. According to the experts quoted by Mongabay, the offshore sector needs clarity on several fronts, from power evacuation and financing to environmental clearances.

Govt to come out with a mandate on usage of green hydrogen

The Centre may announce a mandate on the use of green hydrogen, secretary in the ministry of new and renewable energy (MNRE) Bhupinder Singh Bhalla said. The Energy Conservation Act has been amended and now there is a legal provision to enforce the mandate he said, adding that the government is first trying to figure out whether it can collate demand, aggregate and make it more clear for the industry to set up production facilities, ET reported. Bhalla said export-related topics were also discussed during a roundtable at the International Conference on Green Hydrogen (ICGH-2023) in the Capital. Singapore, Korea and Japan along with the EU participated in the roundtable. Out of the planned green hydrogen production by 2030 under India’s green hydrogen mission, around 70% would be for export, the secretary said.

Indian Oil to convert 50% of its refineries’ hydrogen use to green by 2030

Indian Oil Corporation (IOC) plans to green 50% of hydrogen produced at its refineries by 2030.  India’s largest fuel retailer, estimated it would amounts to 700,000 metric tonnes per annum (mtpa) by 2030, of which 350,000 mtpa will be converted to green the ET reported. The company’s R&D director Ramakumar also the country’s first green hydrogen plant operating on a commercial scale will be at their Panipat refinery, which will have 7,000 mtpa capacity. He said his team is working on using sea water produce green hydrogen. currently for 1kg of green hydrogen production, about 20kg of de-ionised water is required.

Another issue was the potential for standardised batteries to become commodities fast, eliminating the competitive advantages of different businesses.

Industry opposes standardisation, stalls battery swapping policy

The battery swapping policy released by Niti Aayog in April last year has been stalled following opposition from the industry over interoperability standards stated in the draft scheme. The policy aimed to make charging EVs as quick as refuelling conventional vehicles. Now, a highly “watered down” version of the scheme is being considered, reported the Economic Times. Standardised battery dimensions and specifications for use in vehicles with battery switching, particularly two- and three-wheelers, were included in the draft policy. This was done so that EV customers, independent of the brand of their car or battery, may quickly swap out their discharged batteries for fully charged ones at any swapping station. Companies opposed the scheme’s main interoperability idea, however, as it would have required them to update their current infrastructure and production-ready prototypes to comply with the new standardised criteria. Another issue was the potential for standardised batteries to become commodities fast, eliminating the competitive advantages of different businesses.

EV transition timelines too tight, need relaxation: Industry bodies to Delhi govt 

The Delhi government has been urged to relax the deadlines for EV transition that it set forth in its draft aggregator policy by numerous organisations representing the tech and internet industries, including Nasscom, IndiaTech, and IAMAI. These bodies have made the case that a hasty switch to EVs could have an adverse effect on the livelihoods of gig workers in Delhi who had purchased conventionally powered two-wheelers. The electrification mandates seem “impossible to achieve” given the short deadlines, the absence of supporting infrastructure, and the low availability of EVs in Delhi, particularly in the 2-wheeler and 4-wheeler segments.

Additionally, they said that the plan places the burden of transition on the platforms, which have no control over the vehicles. Since the vehicles belong to the gig workers, it has to be their decision to switch to electric automobiles. Therefore, such a regulation will result in entry obstacles for people who cannot afford an EV.

Karnataka govt may remove 100% EV road tax exemption, producers concerned

Karnataka’s transport department recommended ending the 100% exemption from road taxes and replacing it with a 50% road tax for electric vehicles, Money  Control reported. Concerns about the potential removal of the MV tax exemption have been expressed by EV firms and potential customers because it would result in increased prices for EVs in the state. While EV usage has grown in Karnataka in recent years, the higher costs may put off some potential buyers from making the move. According to statistics, the state has almost 3 crore registered automobiles, including 2.37 lakh EVs. Karnataka has seen a considerable increase in the number of EVs registered, going from 6,152 in 2019 to 9,716 in 2020, 33,314 in 2021, and 95,934 in 2022. About 77,711 EVs were registered in Karnataka between January 1, 2023, and July 6, 2023. 

Tamil Nadu could bring in 35% of all EV investments in India till 2030

The Tamil Nadu government said the state anticipates receiving about 35% of all EV investments that the country will bring in through 2030, Business Standard reported. Ola, Ather, and TVS Motor, the top three manufacturers in the EV two-wheeler market at the moment, are all from Tamil Nadu. The state also manufactures about 68% of all EV two-wheelers sold in India. Major industry players like Hyundai, Ola Electric, Ather, Renault-Nissan and TVS Motor have lined up their electric vehicle investment plans in the state, taking the projected EV investments in the state to approximately ₹43,000 crore, one of the highest in India. To improve the local consumption, the state is developing the EV ready infrastructure in six cities, including Chennai, Coimbatore, Tiruchirappalli, Madurai, Salem, and Tirunelveli. 

First batch of four e-buses rolled out in Kargil

In an effort to build Leh and Kargil smart cities and turn Ladakh into a carbon-neutral Union Territory, the first batch of four electric buses has been introduced in Kargil, the Economic Times reported. One bus would travel around Kargil town anticlockwise, stopping at the new district hospital’s location, and another would make three daily excursions from Kargil to Sankoo. The third e-bus will run daily from Kargil to Drass and back to Kargil, while the fourth e-bus will run daily from Kargil to Leh.

India has reportedly asked the International Maritime Organisation (IMO) to focus on a realistic target that will ensure net zero carbon fuels occupying 5 % of the marine fuel mix by 2030, without any additional checkpoints during this period.

India asks IMO to establish 5% zero-carbon marine fuel mix by 2030

India reportedly asked the International Maritime Organisation (IMO) to focus on a realistic target that will ensure net-zero carbon fuels occupy 5% of the marine fuel mix by 2030, without any additional checkpoints during this period. At the plenary of the 80th session of the Maritime Environmental Protection Committee, Indian delegate Ajithkumar Sukumaran, chief surveyor-cum-additional DG, Ministry of Shipping, said, “Any unrealistic target is to excessively pressurise the Centre to resort to flawed policies, industry’s unsustainable investments haste and the research push through half-cooked and immature technological solutions.”

Indian refiners start paying for Russian oil imports in Chinese Yuan

According to a Reuters exclusive, Indian refiners have begun paying for some oil imports from Russia in Chinese yuan, as Moscow has been forced to find alternatives to the dollar—the main global oil currency—for settling payments. Russia’s invasion of Ukraine has shifted global trade flows with India emerging as the largest buyer of Russian oil. As per a report, in June, Indian Oil Corp became the first state refiner to pay for Russian purchases in Chinese yuan.

Govt may recover excess revenue earned by power firms in spot markets

India is considering a plan to recover excess revenue earned by power plants in spot markets in order to provide funds for gas-fired stations during crises. A uniform price cap on spot power trades would be replaced with new limits for each source of power generation. The cap was lowered to ₹10 in April, from ₹12 last year and ₹20 previously. While the move could help power retailers that struggle to buy electricity on markets when prices are high, it could hurt the margins of power companies that sell in spot markets. 

Coal production doubled in first quarter of 2023-24 FY: NTPC

The state-owned power giant National Thermal Power Corporation (NTPC) announced that coal production from its captive mines has increased by an astounding 99% and has witnessed an increase of 112% in coal despatching in the first quarter of 2023-24 FY. According to a statement from the company, Q1 FY24 saw an exceptional increase in coal production from Q1 FY23 of 4.27 MMT to 8.48 MMT.

Centre probes sudden increase in met coke imports

The government started a safeguard probe into the sharp increase in the imports of metallurgical coke, used as fuel in steel and chemicals plants, following a complaint by domestic industries. The BLA Pvt Ltd, Jindal Coke Ltd, Saurashtra Fuels, Vedanta Malco Energy and Visa Coke Ltd, in an application to the commerce ministry’s arm Directorate General of Trade Remedies (DGTR) have alleged that there has been a significant and recent increase in the inbound shipments of low ash metallurgical coke in India, which is adversely impacting the industry.