Demand for Critical Minerals Across the Globe

This editorial is based on Critical mineral supplies vital to clean energy shift which was published in The Hindu BusinessLine on 13/07/2023. It talks about the increasing demand for critical minerals across the globe and the associated challenges.

For Prelims: Minerals, Critical Minerals, Electric Vehicles, Solar Panels, Wind Turbines, KABIL

For Mains: Significance of Critical Minerals, Current Scenario for Critical Minerals Around the Globe

As the world rapidly embraces clean energy technologies and transitions towards a sustainable future, the demand for critical minerals has soared to unprecedented levels. These essential minerals, including lithium, cobalt, nickel, and copper, play a pivotal role in powering electric vehicles, solar panels, wind turbines, and other clean energy devices. However, the surge in demand has outpaced the supply of these critical minerals, giving rise to significant challenges.

China holds a dominant position in the supply of certain crucial materials for the green transition, which is seen as a potential supply risk. An example of this is the recent restrictions imposed by China on the export of important metals like Gallium and Germanium. This highlights the concern about relying heavily on a single country for the supply of these essential materials.

India needs to draw important lessons from the global scenario. While aiming for a rapid decarbonisation and energy transition, India may face challenges due to the limited availability of key minerals and metals required for a swift transition. The success of India's efforts in achieving its goals will be dependent on the uncertainties and fluctuations of the world market for these critical resources.

Drishti Mains Question

Considering the uncertainties of the global market, discuss the potential implications of limited access to critical minerals on India's ability to achieve an accelerated transition towards clean energy.

Q. Recently, there has been a concern over the short supply of a group of elements called ‘rare earth metals’. Why? (2012)

Which of the statements given above is/are correct?

(a) 1 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3

Ans: (c)

Q. Despite India being one of the countries of Gondwanaland, its mining industry contributes much less to its Gross Domestic Product (GDP) in percentage. Discuss. (2021)

Q. “In spite of adverse environmental impact, coal mining is still inevitable for development”. Discuss. (2017)

Critical mineral supplies vital to clean energy shiftFor Prelims:Minerals, Critical Minerals, Electric Vehicles, Solar Panels, Wind Turbines, KABILFor Mains:embraces clean energy technologies and transitions towards a sustainable future,critical minerals essential minerals, including lithium, cobalt, nickel, and copper, play a pivotal role in powering electric vehicles, solar panels, wind turbines, and other clean energy devices.the surge in demand has outpaced the supply of these critical minerals, giving rise to significant challenges.holds a dominant position in the supply of certain crucial materials for the green transitionrecent restrictions imposed by China export of important metals like Gallium and Germanium.the concern about relying heavily on a single country for the supply of these essential materials.Minerals:Minerals are natural substances that are formed by geological processes.definite chemical composition and physical properties. classified into metallic and non-metallic mineralsthose that contain metals or metal compounds those that do not contain metals,Critical Minerals:minerals that are essential for economic development and national security. lack of availability identified a set of 30 critical minerals for India.has set up KABIL or the Khanij Bidesh India Limited, a joint venture of three public sector companies, to ensure a consistent supply of critical and strategic minerals to the Indian domestic market.the mineral security of the nation; it also helps in realising the overall objective of import substitution.Rapid Surge in Demand and Market Growth for Energy Transition Minerals (Critical Minerals): the demand for lithium tripled, cobalt increased by 70%, and nickel rose by 40%,energy sector.International Energy Agency (IEA) market for energy transition minerals reached $320 billion in 2022Global Efforts through Policy Measures:mitigate uncertain global supply chains, countries are implementing new policiesUnited States (US)CanadaEuropean Union (EU) Australia have enacted regulatory legislationIndonesia, Namibia, and Zimbabwe have imposed restrictions on the export of unprocessed mineral ores.Industry's Role through Vertical Integration:becoming more actively involved in the critical minerals value chain. includes engaging in activities like mining and refining,establishing long-term agreementsGeopolitical Tensions and Resource Nationalism:global relations between nations have become more polarised US-China trade warRussia-Ukraine war.led to sanctions and disruptions in established trade patterns. there is an increasing trend of resource nationalism their own resources and impose restrictions on exports. These factors contribute to uncertainties in global trade flows.Supply-Demand Dynamics:demand surpassing supply. This rise in material prices will likely disrupt the production costs of devices like solar panels and electric vehicles.currently confronted with both global and domestic challenges in ensuring reliable supply chains for critical minerals.there are few major risks to consider:Covid-19 Impact: Covid-19there is a significant risk of a slowdown in the extraction, processing, and exports of critical minerals.Russia-Ukraine War:Russia is a major producer ofsignificant producer of ongoing war between the two countries raises concerns about the stability and availability of these critical mineralsImpact of China-Russia Partnership and Disparity in International Initiatives:, primarily due to the strategic partnership between China and Russia. alliance could have implications for the stability and availability of critical minerals.strategies such as the Minerals Security Partnership (MSP) and the G7's Sustainable Critical Minerals Alliance.have not been actively involved in these initiatives, potentially missing out on the benefits and protection offered by these partnerships.India does not have many of these mineral reserves, or its requirements may be higher than the availability, necessitating relianceKeeping up with Rapid Demand Growth:crucial to assess whether the global supply of these minerals can keep pace with this surge in demand.Diversifying Sources of Supply:diversifying the sources, countries and industries can reduce vulnerabilityEnsuring Clean and Responsible Sourcing:can be supplied from clean and responsible sources.important to promote sustainable and responsible practices throughout the critical minerals value chainEnsuring Resource Availability: includes evaluating the domestic reserves of critical minerals and exploring opportunities for their sustainable extraction there should be strategies to ensure a steady supply of these materials, mitigating risksFinancial Considerations: infrastructure development, research and development, and policy support. financing mechanisms, incentives, and funding models that can attract both public and private investments.avenues for international collaborations and exploring innovative financing optionsTechnology as the Key Driver:required for the world to focus on fostering domestic technological capabilities creation of an ecosystem that supports the development, adoption, and scaling up of innovative clean energy solutions.Drishti Mains QuestionQ. Recently, there has been a concern over the short supply of a group of elements called ‘rare earth metals’. Why? (2012)Which of the statements given above is/are correct?(a)(b)(c)(d)Ans: (c)Q.(2021)Q. “(2017)