With growing solar capacity, electric cars, and green hydrogen projects, India’s shift to clean energy is quickening. But acquiring vital minerals like lithium, cobalt, nickel, copper, and rare earth elements is becoming more important than simply replacing fossil fuels. The nation’s energy aspirations could be severely hampered by unstable access to these resources.
The vulnerability of mineral supply chains has been revealed by recent international events. These resources are now more uncertain because to export limitations, geopolitical conflicts, and supply shocks, particularly from areas like the Democratic Republic of the Congo and China’s tightening regulations. Export restrictions currently apply to more than half of important energy minerals, rendering the market unstable and susceptible.
India is especially vulnerable because of its significant reliance on imports of minerals like cobalt and lithium. By 2040, demand for lithium is predicted to have increased fivefold. This poses financial risks since growing mineral prices may raise the cost of batteries, which would reduce the affordability of electric vehicles and hinder the expansion of manufacturing. Global battery prices might increase by as much as 50% in the event of a protracted supply disruption.
Instead of viewing these minerals as mere commodities, countries around the world are viewing them as strategic assets. Nations are investing in foreign mining, establishing long-term contracts, and accumulating reserves. In an attempt to ensure supply, India has started working with nations like Brazil, Argentina, and Australia. But given the scope of the task, these efforts are still in their infancy.
Beyond mining, processing and refining pose a significant problem. China controls a significant portion of the value chain in these highly concentrated stages. Lack of indigenous processing capacity could leave India reliant on outside parties even if it manages to procure raw supplies.
India needs to change from a passive import policy to a proactive one in order to address this. This includes establishing long-term supply arrangements, developing domestic refining capacity, investing in mining assets abroad, and setting up strategic reserves. Government intervention in conjunction with industry cooperation is also crucial.
In the end, securing the materials that enable renewable energy targets is just as important to India’s clean energy future as achieving them.
