China and Hong Kong account for 96% of India’s lithium imports.
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China’s share in India’s lithium imports in 2020-21 was 73%. If Hong Kong is also included, it comes to 96 per cent. Apart from lithium, India is also completely dependent on imports for critical minerals such as cobalt, nickel, vanadium, niobium, germanium, rhenium, tantalum and strontium. In addition, India also imports metals like copper, gallium, graphite, phosphorus, potash, tin, titanium and tungsten. Their economic importance is very high, but the risk of supply is also associated with them. Private companies have welcomed the government’s initiative but say it needs a clear policy.
what the industry wants
Demand for some of these metals is expected to pick up significantly, but minor disruptions in the supply chain can be huge. This may affect hi-tech electronics, telecommunications, transport and defense industries. According to industry estimates, lithium demand is expected to grow 42 times between 2020 and 2040, and cobalt demand is expected to grow 25 times between 2020 and 2040. Tarun Mehta, CEO of Ather Energy, a company that manufactures electric two-wheelers, said that the government has taken the first step to reduce the risk in the supply chain. Industries should be given incentives for mining and refining of metals.
15 countries have at least 55% of the world’s reserves of cobalt, copper, graphite, lithium, manganese, nickel and rare earth elements. These include Australia, Brazil, Chile, China, Congo, Gabon, Indonesia, Madagascar, Mozambique, New Caledonia, Peru, Philippines, Russia, South Africa and the US. Each of these minerals has great importance in new age industries. India does not have any of these minerals. In such a situation, India will have to find new deposits or ensure guaranteed supply from abroad. Economist Pravan Sen says that India should make reserves of some critical materials.
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how low will be the price
According to government and industry estimates, India’s EV market is expected to cross one crore units by 2030. In 2022 it was 10 lakh units. But this will be possible only if there is no major bottleneck in supply. Lithium plays an important role in battery energy storage systems. The easy and affordable availability of lithium will also bring down the cost of storage batteries. The battery accounts for 60 percent of the total cost of an electric vehicle. Similarly, refining of copper and nickel in the country can reduce the price of a vehicle by Rs 15,000 to 20,000.
Cobalt is used in battery electrodes, turbine engine components, and automobile airbags. Similarly, nickel has an important role in solar panels, batteries, aerospace and defense applications and EVs. India imports both of these. China dominates the processing of these minerals. Europe is also moving fast in this direction. Congo produces 70% of the world’s cobalt.
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