Editor’s Note
The extensive use of fossil-based fuels has led to rampant environmental degradation. Rare metals can power the production of energy-efficient devices and systems and reduce fossil fuel consumption. Currently, China is the biggest supplier of these metals. India, too, has a fair holding of rare earth reserves. However, the extraction and processing of these metals are major challenges. The article elaborates on the associated issues.
The eighteenth century ushered in the first industrial revolution with the development of steam engines energized by black stone or coal. Its sequel was based on the advent of petrol engines, and this time, the energy source was rock oil or petroleum. This technology-driven modernisation has led to the extensive use of coal and oil, triggering the catastrophic environmental degradation we suffer today. Recognising the dire need for pragmatic solutions to stabilise and possibly reverse the manmade ecological disaster, nation-states set aside their differences and signed the Paris Agreement in 2015 during the 21st United Nations Framework Convention on Climate Change (COP 21).
From initially curbing and finally eliminating the use of fossil fuel-based systems, the solution envisioned using energy-efficient ‘Green’ and other emerging technologies that would assist in decarbonisation and restoration of the ecological balance. These new technologies, combined with digital skills, are currently the way ahead for producing energy-efficient devices, equipment, and connectivity in all technology-driven fields, and this transition sets in motion the third industrial revolution.
The energy source critical for the switch to new-age technologies is found in rock-borne substances referred to as rare metals: concentrates packed with excellent magnetic, catalytic, optical, and other properties. Thirty such metals, such as vanadium, platinoids, tungsten, beryllium, niobium, etc., are embedded in terrestrial rocks in minuscule quantities.
While the rare metals will power the production of energy-efficient devices and systems, the cost shall be exorbitant, both economically and environmentally. The growing demand for electric vehicle batteries alone will require opening nearly 400 new mines by 2035 to extract graphite, lithium, nickel, etc. Extraction of rare metals is specialised, tedious and toxic in nature:
“Eight and a half tons of rock needs to be purified to produce a kg of Vanadium; sixteen tons for a kg of cerium; fifty tons for a kg of gallium and a staggering 120 tons for a meagre 100 grams of lutetium”. Mining, processing and refining rare metals require tons of toxic chemicals and fresh water: on average, a ton of rare metal production requires 30,000 cubic meters of fresh water. The adversarial environmental impact is already apparent in China, where nearly 10,000 such big and small mines are resulting in dangerous water and soil contaminations of the irreversible kind.
Guillaume Pitron, the author of the book ‘The Rare Metals War’, writes ‘, The energy and digital transition will devastate the environment in untold ways. Ultimately, the environmental price of building this new civilisation is so staggering that there is no guarantee that you will succeed’. However, a French researcher and mineral resource specialist, Olivier Vidal, says, “This transition will come at a cost until 2050, and after that, we shall reap the benefits for the next 500 years”. The debate goes on, but the switch and third industrial revolution is inevitable and is the way ahead, irrespective of the challenges of the initial transitioning and stabilisation phases.
According to an article published by subject expert Madhumita Jaganmohan and Investing News Network, the top eight countries holding rare earth metal reserves are China at number one with 44 million MT, followed by Vietnam, Brazil, Russia, India with 6.9 million MT, Australia, USA with 1.8 million MT and Greenland. In addition, other nations have substantial reserves of rare metals, such as South Africa, Turkey, DRC, and Indonesia. China sits at the top with 40% of the known world holdings of 110 million MTs and presently has a market monopoly.
The race for mining, procuring and controlling the flow of these rare metals is underway, and with it, the game of private and public power players at the international level: the geopolitics on rare earth-rich regions of the world is already taking shape. The linked geopolitics has multifarious dimensions, specifically, the economics of extraction and utilisation, technological know-how and its sharing, dependence on nations rich in this resource, timelines for phasing out coal and oil, and the management of environmental concerns.
As it happened during the second industrial revolution, nations with tech know-how and those holding oil reserves reaped the greatest benefits, resulting in prosperity and power, while those lacking, especially in both, remained underdeveloped and exploited. Similar trends are envisaged during the third industrial revolution. Realising the inevitability and ramifications of the third industrial revolution, nations like Saudi Arabia are investing in the Non-Oil economy, and for the first time in 2023, its non-oil sector has contributed 50% of its GDP.
China is the world’s biggest supplier of rare metals and exploits this capability in its international dealings. There was a time when the Japanese Tech Giants depended on China for nearly 80% of their rare metal requirements. In 2010 or so, Japan was forced to release a Chinese fishing trawler seized in the disputed waters of the Senkaku Islands when, in response, China stopped the supply of rare metals to the tech giant Nippon, resulting in its near collapse. It was after this incident that Japan diversified its dependency on other sources; however, despite that, it is still compelled to import nearly 40% of its rare earth metal requirements from China.
The recent meeting between the Dalai Lama and the US delegation, comprising McCaul, Nancy Pelosi, and five others, apart from other agendas, also appears to be part of the long-term geo-economic strategy of gaining a foothold in the abundantly mineral and freshwater-rich Tibetan plateau.
Fortunately, India is very well placed at a holding of 6.9 million MTs of rare earth metals, especially in eight varieties. Recently, the region of Reasi in J&K was in the news for the discovery of 5.9 million ton reserves of lithium, which is not a rare metal but is majorly used in manufacturing batteries. While these reserves have been found, their extraction and utilisation are yet to meaningfully fructify, as evident from the fact that today, India processes a mere 2,900 MTs of rare metals annually. The strategy and policy formulation are at a very nascent stage, and the challenges therein are enormous.
First and foremost, India lacks the tech know-how and machinery required for rare metal extraction, which will not be forthcoming without a cost from those who have it, implying collaborations with international tech giants in the field will extract their pound of flesh. Secondly, India is not tech-savvy enough to optimally utilise rare metals due to a lack of an adequately skilled workforce and the proficiencies required to produce high-end emerging technologies-based devices. It again implies dependence on or collaboration with the best in the world. Thirdly, mining rare metals will have adverse environmental consequences due to the high excavation quantities and final produce ratios. The dangerous combination of high population densities and the already fragile ecosystem obtained in most parts of the country makes it nearly impossible to mine without difficulties.
The related political and public outcries are likely to adversely impact the opening of rare metal mines. One may recall the resistance to the much-needed Narmada Dam on grounds of ecological impact and population displacement. Fourthly, the economics of creating these emerging and evolving technologies to support 1.4 billion people shall be mind-boggling. Finally, geopolitical games by vested parties that create conditions that are not favourable for the optimal extraction of rare metals, especially in the minerals and rare earth-rich regions of J&K and the North East, are inevitable. The game is already underway in the North East to reignite unrest with long-term intentions of denying resources to India and dreaming of laying hands on them.
In the backdrop of the challenges envisaged, an all-encompassing and well-thought-out national strategy would be necessary for stepping into, transitioning and sustaining the Third Industrial Revolution based on rare metals. For a change this time, unlike the near complete dependence on others for black oil, India has the energy reserve required. The availability of energy resources within the country will also facilitate better bargaining positions in the geopolitical and geo-economic arenas. The need of the hour is to play it right and in time.
Lt Gen Vijay Singh (Retd)
