Building resilient mineral supply chains
Introduction:
- In his Independence Day address, Prime Minister Narendra Modi exhorted the country to pursue atma nirbharta in energy by focusing on clean energy technologies. Concerns over the pricing and availability of oil and gas in the wake of the Ukraine crisis continue to fuel global policy debates on energy security. However, the fragility of clean energy supply chains obscures pathways for countries to reduce dependence on fossil fuels.
- Securing access to key minerals such as lithium, cobalt, nickel and rare earth metals is critical for building resilient and indigenous supply chains for clean energy technologies.
About rare earth metals
- They are a set of 17 metallic elements including the fifteen lanthanides plus scandium and yttrium that show similar physical and chemical properties to the lanthanides.
- They are called ‘rare earth’ because earlier it was difficult to extract them from their oxides forms technologically. They occur in many minerals but typically in low concentrations to be refined in an economical manner.
- The 17 Rare Earth Metals are cerium (Ce), dysprosium (Dy), erbium (Er), europium (Eu), gadolinium (Gd), holmium (Ho), lanthanum (La), lutetium (Lu), neodymium (Nd), praseodymium (Pr), promethium (Pm), samarium (Sm), scandium (Sc), terbium (Tb), thulium (Tm), ytterbium (Yb), and yttrium (Y).
- These minerals have unique magnetic, luminescent, and electrochemical properties and thus are used in many modern technologies, including consumer electronics, computers and networks, communications, health care, national defense, etc.
A challenging task
- Imported inflationary pressures through exposure to volatile oil and gas markets also pose risks to macroeconomic growth and stability, particularly for India, import-dependent for around 85% of its oil and half of its gas needs.
- We face several challenges in being self-reliant on key minerals and REM:
- Reserves are often concentrated in regions that are geopolitically sensitive or fare poorly from an ease of doing business perspective.
- A portion of existing production is controlled by geostrategic competitors. For example, China wields considerable influence in cobalt mining in the Democratic Republic of Congo through direct equity investments and its Belt and Road Initiative.
- Future mine production is often tied up in offtake agreements, in advance, by buyers from other countries to cater to upcoming demand.
- As a first step towards the sourcing of strategic minerals, the Indian government established Khanij Bidesh India Limited (KABIL) in 2019 with the mandate to secure mineral supply for the domestic market. Based on a CEEW study, here are suggestions that policymakers could consider to further this objective.
Way forward:
- First, figure out the mineral requirements of the domestic industry. This could best be accomplished by a task force which includes the ministries of power, new and renewable energy, heavy industry, and science and technology. Creating five-year road maps with clear targets for deployment and indigenous manufacturing across clean energy applications would provide visibility to domestic investors. Further, assess the technology mix that would support this deployment. On this basis, determine the quantities of minerals necessary to support indigenous manufacturing.
- Second, coordinate with the domestic industry to determine where strategic interventions by the government would be necessary for the purpose. KABIL could collaborate with industry to bolster its market intelligence capabilities for tracking global supply-side developments. Developing a granular picture of available and committed production capacities and economy-wide and sector-specific policy developments is the first step to develop an informed perspective on mineral supply. If there is adequate visibility on sourcing opportunities in conducive geographies, the private sector should be encouraged to secure minerals for its own requirements.
- Third, if conducive investments opportunities don’t exist, KABIL should pre-emptively sign offtake agreements with global mineral suppliers to secure future production. It could aggregate a reliable supply of minerals for domestic requirements and sign back-to-back sales agreements with the domestic industry. Such large-scale centralised national procurement could be done at preferential terms.
- Fourth, the government should jointly invest in mining assets with geostrategic partners. KABIL should make equity investments in mining jurisdictions that private sector investors may deem too risky. It should leverage government-to-government partnerships to mitigate investment risks. This could be done through joint investments with sovereign entities from geostrategic partners or private sector entities with expertise in specific geographies. The External Affairs Ministry could initiate conversations with partner countries. Establishing resilient clean energy supply chains is a priority for the Quad, for instance.
- Fifth, support technologies that utilise domestically available materials. The deployment of technologies such as sodium-ion batteries could reduce requirements for sourcing minerals from beyond India’s borders. While the current performance-linked incentive scheme on batteries is technologically agnostic, India could consider creating a tranche of capital to incentivise investments in technologies that rely on local raw materials. It could also propose co-development of such technologies with geostrategic partners.
Conclusion:
- Apart from above suggestions, developing policies on urban mining aimed at recycling mineral inputs from deployments that have completed their useful life could help further reduce dependence on international sourcing.
- Besides Ukraine, other potential geopolitical flashpoints also exist against a backdrop of dwindling multilateral cooperation. India must act immediately and decisively to mitigate these risks to its energy security.
Delhi-NCR’s revised action plan ‘GRAP’ to fight air pollution
Introduction:
- A revised action plan to fight the serious challenge of air pollution in Delhi and the National Capital Region (NCR) has come into force after a sudden dip in air quality in the capital and its neighbouring areas.
- On October 6, the first stage of the revised Graded Response Action Plan, or GRAP, was implemented, with the Commission for Air Quality Management (CAQM) asking the authorities in Delhi-NCR to enforce strict measures, including a ban on all construction and demolition activities in plots of sizes equal to or more than 500 square metres that aren’t registered on government-mandated web portals.
The Graded Response Action Plan (GRAP):
- To deal with the multi-faceted risks linked to air pollution, the Central Pollution Control Board (CPCB) submitted a list of measures to address different levels of air pollution to the Supreme Court in 2016. These measures coalesced into a set of anti-air pollution measures followed in Delhi and its vicinity according to the severity of the situation called GRAP.
- The GRAP was approved by the SC after modifications and notified by the Ministry of Environment, Forests and Climate Change (MoEFCC) in 2017, for the “prevention, control and abatement” of air pollution in Delhi-NCR. The Environment Pollution (Prevention and Control) Authority (EPCA) was the designated agency to implement the plan.
- With multiple State and central bodies working on the problem, a need was felt to consolidate resources to efficiently tackle the problem of toxic air. In 2020 and 2021, ordinances were promulgated for the constitution of a commission for “better coordination, research, identification, and resolution of problems related to air quality” in the NCR and adjoining areas in Haryana, Punjab, Rajasthan and Uttar Pradesh.
- On August 12, the Commission for Air Quality Management in NCR and Adjoining Areas Act, 2021 received the President’s assent. It established a statutory body (CAQM) with enhanced powers to control air pollution in Delhi NCR and adjoining areas, especially to address stubble burning practice in Punjab , Haryana and western UP.
GRAP as per Air Quality Index (AQI)
The GRAP for Delhi-NCR is divided into four stages of air quality —
- Stage 1 for “poor” AQI ranging between 201 and 300
- Stage 2 for “very poor” AQI of 301-400
- Stage 3 for “severe” AQI of 401-450
- Stage 4 for “severe plus” AQI more than 450
As per the plan, actions under Stages 2-4 are invoked at least three days in advance of the AQI reaching the projected levels.
Stage 1: In this stage, besides a ban on construction and demolition activities at specific sites, agencies must ensure that all solid waste is lifted from dedicated dump sites, and none is dumped on open land. Heavy fines are to be imposed for openly burning municipal solid waste and biomass. Roads will be mechanically cleaned and water sprinkled from time to time.
Stage 2: mechanised sweeping of roads will be done daily, while water will be sprinkled using dust suppressants at least on alternate days. The use of coal and firewood in eateries would bebanned.
Stage 3: The frequency of cleaning roads intensifies in this stage. Water would be sprinkled daily before peak traffic hours. Authorities will levy different rates on public transport services to encourage off-peak travel. A strict ban will beenforced on all construction activities, except ongoing construction of railway, metro, airport and hospital projects.
Stage 4: When the air quality rises to dangerous levels, entry of all trucks except those carrying essential commodities, or providing essential services is to be stopped into Delhi. This will be followed by a ban on plying of diesel-operated medium goods and heavy goods vehicles in Delhi, except those carrying essential items.
Additional emergency measures like closing schools and other educational institutes, non-emergency commercial activities and plying of vehicles on an odd-even basis may also be enforced.
Other measures being taken
- Besides GRAP, the government in Delhi has also launched a 15-point action plan this year to tackle the issue of pollution in NCR. As per Delhi Environment Minister Gopal Rai, the winter action plan will focus on stubble management, dust pollution, vehicular emission, open burning of garbage, industrial pollution, pollution hotspots, smog towers, public participation, firecrackers and joint action with neighbouring states among other aspects.
- Measures include the installation of anti-smog guns at construction and demolition sites larger than 5,000 square metres. Over 500 teams will be formed to check the burning of garbage in the open and ensure that the GRAP is implemented on construction sites in the city. The Delhi government has also launched an “advanced Green War Room” to monitor air pollution and ensure effective implementation of its winter action plan”.
