Lagging behind in mineral geopolitics: India needs a rare earth strategy

The quest for minerals and other resources drove European colonial expansion from the 1500s onwards. In their search for gold, diamonds, and later other resources, European powers travelled and then subjugated the people in many countries in Asia, Africa, and Latin America. Even North America was discovered because of Spain’s search for new land and resources to exploit.

 

The pursuit of minerals and fuel resources remains the driving force behind geopolitics even after the end of old-style colonialism. Petroleum and natural gas dictated much of the geopolitics of the 20th century and even the current millennium. Now, the hunt for minerals essential to the clean energy transition has also become a key driver of wars, alliances, and even the offer of foreign aid.

 

The term “green colonialism” or “eco-colonialism” has been coined to refer to the efforts by the Global North to exploit the mineral reserves of the Global South to manage its own energy transition and reduce the emissions of its economies. Lithium, cobalt, nickel, and rare earth reserves in Latin American and African nations drive international affairs today.

 

The US offer to continue helping Ukraine, if a suitable agreement for Ukraine’s minerals is reached, is one example of the geopolitics of minerals.

 

While traditionally the Western powers have been at the forefront of the efforts to dominate and monopolise critical mineral and petroleum reserves, China has learned how to play the game too. Beyond its own reserves of rare earths, it has been relentless in its endeavour to establish control over the lithium, cobalt, nickel, and other mineral reserves in other developing countries. 

 

India has traditionally been a laggard in mineral and energy geopolitics. Successive governments have talked big about measures needed to secure and protect India’s energy future but failed to take any great steps. Sporadic, not sustained, efforts have characterised our moves so far. ONGC Videsh, a wholly-owned subsidiary of ONGC, has participating interests in 35 potential oil and gas reserves in 15 countries, but, so far, these have not made a meaningful difference to our oil security or oil import bills. The private sector, too, has shown only limited interest.

 

There is little evidence that Indian policymakers have learned their lessons, even though the country has set ambitious clean energy targets. While India has become a part of several mineral exploration groupings and is also negotiating independent agreements with countries that have proven reserves of minerals required for green energy, its approach remains neither methodical nor long-term.

 

The current mineral geopolitics has seen two broad approaches. The Western European countries and, to an extent, the US, would prefer to exploit the mineral reserves of the Global South rather than their own. This is primarily to keep their emissions low and minimise environmental pollution in their own country. For example, recent studies show that there are good reserves of cobalt, lithium and rare earths across different countries in Western Europe, but they are probably likely to exploit these only if they cannot source these from other countries. Similarly, the US possesses vast lithium reserves but has been hesitant to tap them due to environmental concerns. Whether President Donald Trump would alter this stance remains to be seen.

 

The other approach to mineral geopolitics is the Chinese one. China aggressively exploits its own reserves while also securing agreements with nations rich in critical minerals. The Chinese dominance over the Republic of Congo’s cobalt mines is a good example of the latter, but equally significant is the country’s domination of rare earth supply by discovering and exploiting its own reserves.

 

China has also built the largest processing capacities for lithium and other critical minerals, despite the industry's highly polluting nature. It has done this to ensure its complete control over the supply chain.

 

India has not taken any of these approaches. Our capacity for processing lithium and other minerals required for electric vehicle batteries is, at best, negligible. Our supply chain for rare earth minerals required for solar and wind sectors is highly vulnerable to China. We have lagged in securing supply agreements just as we have fallen behind in domestic mineral exploration.

 

Whether India possesses big or small reserves of lithium, nickel, rare earths, or cobalt and other such minerals will be known only if we devote enough resources to prospecting and exploration, and have the right policies to discover and exploit these minerals. At the moment, there is no evidence of vast reserves — but neither is there proof that they are absent. Exploration has lagged due to policy constraints and a lack of interest. India has also been slow in securing agreements with countries that have proven reserves.

 

Ideally, we need to do both. Otherwise, the country’s massive energy bill and its dependence on China and other nations for critical minerals will remain high. We need a long-term vision and a sustained effort to ensure that our energy economics are protected. 

The author is a former editor of Businessworld and Business Today, and founder of Prosaic View, an editorial consultancy