NEW DELHI: In about four months from now, India faces a potentially crippling shortage of Helium gas due to falling levels of production in the United States. India imports around ₹55,000 crore ($733 million) of Helium from the U.S. every year for use in rockets and nuclear reactors to MRI scans and electronics. In fact, wherever a high level of refrigeration is required, as in semiconductor chips and magnets, Helium, given its low boiling point, is considered to be an ideal cooling agent.
Helium is a byproduct of the oil and gas industry, so logically it may not be a problem sourcing the gas from elsewhere: Russia, for instance, which has a huge and well developed oil and gas industry, or if you want to look closer, Qatar is there. Of course, that ties India tighter to a region considered volatile and therefore unstable, because of long festering disputes, simmering public resentment against authoritarian governments and so on.
But India has no alternative given that Helium production in the country is non-existent. Although some research on extracting Helium has been conducted by India’s atomic energy establishment, it’s not clear how commercially feasible it is.
The Helium issue mirrors a larger problem for India when it comes to strategic, non-fuel minerals. Here also, the country is dependent to the extent of 80-90 per cent on the supply of strategic minerals from other countries. A July 2016 report (the only of its kind so far) by the Delhi-based Council on Energy, Environment and Water, identifies 12 critical minerals, from a total of 49 non-fuel minerals, that could play an important role in manufacturing and sustainable growth in India in 2030. But India has no declared domestic reserves for the majority of these minerals and is 100 per cent import dependent for seven of them. Worse still, India will be dependent on China for the supply of six of these minerals.
“The critical minerals including beryllium, germanium, rare earths (heavy and light), rhenium, tantalum and so on find specialized use in aerospace, cameras, defence, entertainment, laptops, medical imaging, nuclear energy and smartphones,” the study by Vaibhav Gupta, Tirtha Biswas and Karthik Ganesan noted.
Lack of production of silicon, cadmium (used in rechargeable batteries) and tellurium (for oil refining, in solar cells) neodymium (widely used rare earth magnet) is a major constraint. It leaves India vulnerable to supply disruptions, the authors warned.
These critical minerals could also play a role in nurturing the domestic manufacturing capacity to support the government’s low-carbon plans, such as the 100 GW solar target, lithium-ion batteries for electric vehicles and large scale electricity storage and the national Domestic Efficient Lighting Programme.
The study says India must develop joint partnerships including multilateral trade and economic partnerships with existing global players (private and governments) to ensure assured supply of critical minerals. That may not be easy given reports that China is tightening controls over the export of rare earths. While this could be offset by supplies from the U.S. and Australia, the dependence on external producers remains.
To this end, the government set up KABIL (Khanij Bidesh India Ltd), a joint venture of three public sector undertakings (National Aluminium Company, Hindustan Copper Ltd and the Mineral Exploration Company) in August 2019, with the objective of ensuring “a consistent supply of critical and strategic minerals to the Indian domestic market. While KABIL would ensure mineral security of the nation, it would also help in realizing the overall object of import substitution,” Pralhad Joshi, junior minister for mines, was quoted as saying.
KABIL has a pretty ambitious agenda. It will carry out identification, acquisition, exploration, development, mining and processing of strategic minerals overseas for commercial use and meeting the country’s requirements of these minerals. The sourcing of these minerals or metals is done by creating trading opportunities, G2G collaborations with producing countries or strategic acquisitions or investments in the exploration and mining assets of these minerals in the source countries.
The company will help in building partnerships with other mineral rich countries like Australia, South Africa and in South America, where Indian expertise in exploration and mineral processing will bring new economic opportunities. Some headway appears to have been made. In July 2020, reports said KABIL had signed an agreement with an Argentine company for the exploration and production of lithium, key to India’s plans for a robust battery supply chain for its ambitious electric vehicle programme. KABIL is also exploring options in Chile and Bolivia, two other top lithium producing countries.
But the key is to identify and locate deposits in India. Three months ago, the government confirmed the discovery of 1,600 tons of lithium in Mandya district, Karnataka. Further exploration will be required to determine if it is commercially worth mining. Like lithium, there could potentially be other deposits of strategic minerals and metals that, if discovered and exploited, could reduce India’s vulnerability to external producers. Unfortunately, only 4 per cent of India’s land mass has been mapped for minerals. This needs to be remedied at the earliest.
Late last month, trade ministers of India, Australia and Japan unveiled a Supply Chain Resilience Initiative where they agreed to share best practices, hold investment promotion and buyer-seller matching events for diversification of supply chains. They are expected to meet every four months to review progress and speed up the process where they depend less on China.
While such cooperation is necessary, geopolitics is very dynamic and constantly changing. All the more reason for India to step up the pace of its domestic search for strategic minerals and metals while forging partnerships with producers of such minerals.
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