Rare earth elements and critical minerals will be next geopolitical battleground: Survey

Emphasizing that the transition to clean energy necessitates significant growth in demand for critical minerals (CM), the Economic Survey on Tuesday said availability of rare earth elements (REE) will be the next “geopolitical battlefield”, after crude oil.

“As we know, rare earth elements and their manufacturing process are essential to renewable energy (RE) generation. The problem is that they are produced in few countries and processed in even fewer countries. It can be difficult to pull off a globally synchronized energy transition to non-fossil fuels in the case of The unavailability of suitable rare earth elements and CM would leave fossil fuel-based assets stranded in the economies of many countries, he added.

Cobalt, copper, lithium, nickel, and rare earths are critical to producing electric vehicles (EVs), batteries, and harnessing solar and wind energy. Solar photovoltaic (PV) plants, wind farms, and electric vehicles generally require more minerals than their fossil fuel-based counterparts.

For example, a typical electric car requires six times the mineral input of a conventional vehicle, and an onshore wind farm requires nine times the mineral resources than a gas-powered plant.

Demand for CMs and REEs

The survey indicated that while demand for CMs is set to increase due to global preference and focus on renewable energy, the global CM supply chain is highly concentrated and unevenly distributed. The skewed distribution of resources poses a threat to supply in the face of increasing demand.

Critical metals (CMs) such as lithium, nickel, cobalt, manganese and graphite are essential for battery performance, longevity and energy density, while rare earth elements are essential for permanent magnets essential for wind turbines and electric vehicle motors.

Electricity grids need a massive amount of copper and aluminum, with copper being the cornerstone of all electricity-related technologies.

“A carefully designed multidimensional mineral policy would reduce our dependence and address future problems. The country has resources of heavy nickel, cobalt, molybdenum and geoelectricity, but further exploration will be required to assess the quantities of its reserves,” the survey said.

The need for strategic reserves

There is a need to create strategic mineral reserves along the lines of the Strategic Petroleum Reserves to ensure a continuous supply of minerals. Policies should also consider investing in internal research including technological innovation for mineral exploration and processing and the development of recycling, reuse and reuse (R3) technologies.