- News of the discovery of “5.9 million tonnes inferred resources of lithium” in the Salal-Haimana area of Reasi district, Jammu & Kashmir, by the Geological Survey of India has been received as a game-changer in India’s impending transition to a green economy.
- The term ‘inferred’ refers to the ‘preliminary exploration stage’, the second of a four-step process, according to the Mines and Minerals (Development and Exploration) Act 1957.
Why is this significant?
- Lithium-ion batteries are used in wind turbines, solar panels, and electric vehicles, all of which are crucial in a green economy.
- A World Bank study suggests that the demand for critical metals such as lithium (Li) and cobalt is expected to rise by nearly 500% by 2050.
- While “the global electric vehicle market is projected to reach $823.75 billion by 2030, registering a compounded annual growth rate (CAGR) of 18.2% from 2021 to 2030,” India’s market is projected to register a CAGR of 23.76% by 2028.
- India is seeking to secure its critical mineral supplies and build self-sufficiency in this sector.
- As India currently imports all of its Li from Australia and Argentina and 70% of its Li-ion cell requirement from China and Hong Kong, the lithium reserves in J&K could boost the domestic battery-manufacturing industry.
- If the perceived size of the mineral reserves in J&K is borne out by further exploration, India could jump ahead of China vis-à-vis its Li stockpile.
- The J&K reserves will also help advance the Indian government’s ambitious plan of “30% EV penetration in private cars, 70% for commercial vehicles, and 80% for two and three-wheelers by 2030 for the automobile industry.”
- They will strengthen India’s National Mission on Transformative Mobility and Battery Storage as well.
What are the geostrategic concerns?
- Critical mineral dependencies constitute a major geostrategic concern in the transition to net-zero carbon energy systems.
- In the present scenario, as countries seek to avoid dependencies and vulnerabilities related to critical minerals, the latter are likely to be at least as important as oil and gas in the near future.
- A high level of dependence on China for Li and other crucial metals and their derivatives are also perceived to be sources of energy security risks.
- China currently controls 77% of the global lithium-ion battery manufacturing capacity and is home to six of the world’s 10 manufacturing companies.
- As a result, the EU, the U.S., Canada, India, and other major economies have been trying to leverage alternative supplies that can challenge China’s geopolitical dominance in this area.
- For example, responding to perceived national security concerns, the Canadian government has asked Chinese companies to divest from Canadian lithium-mining companies.
- The growing geopolitical rivalry with China makes India’s security considerations more immediate as well, especially also in light of the longstanding, and recently escalating, territorial and border disputes.
- To reduce dependence on China, the Indian government and industry are pushing for a ‘Rare Earths Mission’ to exploit the country’s critical mineral reserves, which account for 6% of the world’s rare-earths’ reserves prior to the discovery of Li in J&K.
- The new discovery has more geostrategic implications considering the geopolitical sensitivity of its wider location. Although Reasi is in the relatively more stable Jammu region, the Union territory of J&K has been the site of historical cross-border tensions between India and Pakistan, domestic insurgency, and terrorism.
- If the local populace isn’t meaningfully engaged in the impending Li extraction project, the resulting tension could introduce new frontiers of socio-environmental conflict.
What are the environmental effects?
- The applications of Li in renewable energy infrastructure often obscures its significant environmental consequences.
- Extracting Li from hard rock mines, similar to what has already been proposed in J&K, entails open-pit-mining followed by roasting the ore using fossil fuels.
- Industry estimates suggest that this process consumes 170 cubic metres of water and releases 15 tonnes of CO2 for every tonne of Li extracted.
- Open-pit-mining, refining, and waste disposal from these processes substantially degrade the environment, including depleting and contaminating waterways and groundwater, diminishing biodiversity, and releasing considerable air pollution.
- This said, the geological context of mining in J&K differs from Australia, which has the largest Li stock in hard rock mines, in one major way.
- In Australia, Li-bearing pegmatite deposits are found in the ancient geological regions of Pilbara and Yilgarn cratons, whose continental rocks have been stable for over a billion years.
- The Himalaya on the other hand is the youngest mountain range in the world and is much more unstable (as evidenced by the ongoing tragedy in Joshimath).
- Incidents of land sinking have also been reported from a village in Doda district in Chenab valley, which extends to some parts of Reasi.
- In the densely populated context of India, the socio-environmental effects of mining are likely to be far worse than they have been in Australia and likely comparable to lithium extraction in South America.
What can we learn from South America?
- As India embarks on this new journey, it could learn from the experiences of South American countries, especially the ‘lithium triangle’ of Bolivia, Chile, and Argentina, which contain roughly half the world’s known Li. In Bolivia and Chile, Li extraction has been either in the hands of the state or requires mining companies to enter into a contract with state-owned companies.
- In April 2022, Mexican lawmakers introduced reforms to create a state-owned entity to extract, process and sell Li and outlaw all direct private investment and production in the Li sector. Even so, Li mining has had adverse socio-environmental consequences in the region, testing its laws meant to protect Indigenous peoples.
- In 2019, Chile’s environmental regulators approved a $25-million compliance plan for Li miner SQM, charged with overdrawing Li-rich brine from the Salar de Atacama salt flat.
- However, the company failed to satisfy authorities, who reversed their decision in 2020. In September 2021, the Atacama Indigenous Council appealed to regulators citing “constant danger” and called for the “temporary suspension” of SQM’s environmental approvals.
- In August 2022, Chilean regulators approved an updated compliance plan worth $52 million, in which SQM proposed to work with both the regulator and local communities to address environmental infractions.
- Indigenous resistance and increased awareness of the environmental impact of Li-mining has prompted global carmakers, including Mercedes-Benz and Volkswagen, to look for Li mined with the lowest socio-ecological impact. Other corporations are making similar amends.
- Battery Mineral Resources Corp. recently signed an agreement with the Comunidad Agricola Potrerillos Alto and the Comunidad Agricola Punitaqui. Another mining giant, Monumental Minerals, signed an agreement with the Ayquina-Turi Indigenous Community in Chile for 40 exploration concessions totaling 8,500 hectares at the Salar de Turi Li project.
- While such comparisons must account for inter-regional differences, these developments point to the importance of a strong regulatory apparatus that can address both the environmental and the social consequences of Li mining.
What safeguards does India’s mining sector have?
- State government officials in J&K have said plans for Li exploration will involve local communities, who will also be prioritised for jobs in exploration and mine development.
- Yet employment in mining may not fully offset the consequences on local agriculture, animal husbandry, and tourism.
- In recognition of the local effects of mining, in 2015, the Lok Sabha amended the Mines and Minerals (Development and Regulation) Act 1957 to establish the ‘District Mineral Foundation’ (DMF).
- The DMF is a non-profit statutory ‘trust’ for every Indian district affected by mining-related operations that should “work for the interest and benefit of persons, and areas affected by mining-related operations”.
- In practice, the DMFs have become sites of centralised bureaucratic control, without meaningful public participation or accountability.
- For example, a CAG audit in May 2022 noted that the District Collectors of Bokaro, Dhanbad, and Ranchi incurred an expense of ₹1,568.04 crore from DMF funds, without identifying the areas affected by mining or a list of affected people. Ironically, the auditors were denied access to documents related to the functioning of the State-Level Monitoring Committee.
- The general failure of DMFs adds to concerns expressed by environmentalists and concerned citizens about the recent history of weakening of the environmental impact assessment framework.
- The geostrategic importance of Li exploration and extraction makes it even more important that the exploration and extraction of resources should be done in the public interest, and must preempt any serious environmental and social problems.
- Equally importantly, the most effective use of Li reserves should be for the most important parts of the renewable-energy transition, which would also aid the goals of addressing energy poverty and sustainable development.
- To these ends, reducing luxury consumption and promoting public transport should also be an important part of the agenda of a just transition.
SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB