Editorial 1 : The missing mining drive
Context
When it comes to critical minerals, India cannot rely on China — it needs to fast track its own exploration.
The age of Critical minerals
- The evolution of human civilisation is intrinsically linked to the use of metals. Around 7,000 years ago, civilisation made a great leap from the Neolithic Age to the Chalcolithic Age.
- Subsequently, it grew more advanced as it moved to the Bronze Age and then the Iron Age.
- Coal powered the first industrial revolution of the 19th and early 20th centuries. Oil and its derivatives fuelled the second industrial revolution and global prosperity in the second half of the 20th century. Now, the long 21st century is going to be the critical minerals age.
Taken the centre-stage
- Minerals have also taken centre-stage in the global trade war. China is using its disproportionate control over rare earth materials to threaten the US and the rest of the world with the debilitating consequences of restricted supply.
- Twenty or even 10 years ago, the thought of critical minerals or rare earths being at the centre of global conflict, whether geopolitical or geoeconomic, would not have been taken very seriously.
- The only natural resource that figured in the context of international security and strategy was oil. Since then, two things have happened. First, a growing consciousness about climate change. Second, technological advancement towards a fourth industrial revolution.
- The technologies that help mitigate climate change — by enabling a substitution of fossil fuels like coal and oil — are heavily mineral-intensive.
- An electric vehicle uses six times the minerals a conventional vehicle does, largely because its battery is made of lithium, cobalt and nickel.
- Renewable energy infrastructure for solar and wind power is also mineral-intensive. For example, an offshore wind infrastructure project consumes nine times the minerals that a conventional power plant would.
AI as mineral-intensive
- The fourth industrial revolution, which involves AI, robotics and big data, is also mineral-intensive.
- For example, any digital or digital connectivity infrastructure requires copper in large quantities.
- Copper is critical because of its electrical conductivity. Data centres, the backbone of big data and AI, consume a lot of copper.
- As the adoption of these technologies grows, the demand-supply gap of critical minerals will grow.
The concerns
- The biggest risk to the emerging landscape is the heavy concentration in the supply of critical minerals, much greater than the concentration in oil.
- There are two stages of the value chain that are of concern. First, the extraction of the metal ore from the surface.
- Second, the processing of that ore into usable metal. There is a high degree of concentration in the first.
- Cobalt comes almost exclusively from Congo. Indonesia dominates the mining of nickel, almost 50 per cent of the global supply.
- China alone accounts for two-thirds of global rare earths mining. Australia, Chile and China account for a majority of lithium mining.
- In processing, there is complete dominance across the board by just one country, China. Sixty-six per cent of the processing of critical minerals (also including copper and aluminium) takes place in China.
- For rare earths, this goes up to more than 90 per cent. China alone can bring the global EV industry to a halt by restricting the supply of rare earths.
Way forward
- Neither the US nor India can rely on China. It is time to emulate America’s policies and fast track the exploration of critical minerals. As a country that is geologically rich, India must explore within.