After years of extreme population growth, India became the most populus country in the world at over 1.4B people this past April. India’s immense size and swelling population mean elevated energy demands will inevitably follow, more than any other country has seen in decades.
With that growth comes a delicate balance. In 2021, Indian Prime Minister Narendra Modi pledged to cut emissions to net-zero by 2070, at the 26th Conference of Parties (COP) to the United Nations Framework Convention on Climate Change, longer than the US’ goal of net-zero by 2050 or China’s net-zero by 2060.
Solar and wind energy have already grown in the past few years, with India having already achieved its COP 21- Paris Summit commitment nearly nine years ahead of schedule by reaching a 40% non-fossil-fuel power capacity this past March.
“I hold no doubt that India will be the main driver for demand for [battery] metals,” said Monash University’s Mohan Yellishetty, according to S&P Global Commodity Insights. Mohan is a resource engineering professor as well as the co-founder of its Critical Minerals Consortium.
On 28 June, India released its first critical minerals list, which will lay the foundation for metals needed to meet its 2070 target.
“Even if (India) produce(s) some locally, that’s very insufficient for their future demands,” Monash said.
“India could also play a huge role in providing critical raw material supplies to the rest of the world, because of its huge, competent human resources and the scale and cost at which they could produce them compared to China.”
Securing the supply
Having built out its supply chains for critical minerals decades ago, China’s annual imports of battery metals dwarf those of India, according to S&P data. However, India is not sitting idle.
Achieving net-zero will require large quantities of lithium, copper, aluminium, nickel, cobalt, manganese, graphite, and rare earth elements as these are essential for wind turbines, EV motors, and electricity networks.
In June, the US welcomed India to the Mineral Security Partnership (MSP), a transnational association established in 2022 to help members secure a stable supply of raw materials for their economies.
Specifically, the MSP focuses on critical minerals for electric vehicles and batteries. The partnership is as of now comprised of Australia, Canada, Finland, France, Germany, India, Japan, South Korea, Sweden, the United Kingdom, the United States, and the European Union.
Many of these countries are considered low-risk critical minerals opportunities, could aid with battery supply chain technologies and intellectual property, and even promote ESG-friendly mineral sourcing.
India’s copper consumption, for example, is forecast to rise 13% per year on average to fiscal 2025, and the country may overtake Japan as Asia’s second-largest copper market after China by 2025, according to Australia’s most recent edition of Resources and Energy Quarterly.
“Consumption in India is set to benefit from key demographic factors — population growth, as well as higher copper intensity per capita, driven by higher urbanization and living standards,” the report said.
Copper is among the critical components India will require as it is a cornerstone for all electricity-related technologies. Some partners already produce large quantities of these critical minerals on their own, providing alternatives to Chinese supply.
The US, for example, is the fifth largest copper producer. Canada, one of the most minerals rich Western countries worldwide, is abundant in terms of graphite, lithium, nickel, and cobalt.
Australia has almost half of the world’s lithium, is the second-largest producer of cobalt, fifth in nickel production, and the fourth-largest producer of rare earths.
As Asia’s third-largest economy, India can capitalize on these partnerships as the only developing country involved and as a potential source for mineral production, considering the 5.9M metric tons of lithium found earlier this year— the first lithium reserve of that magnitude discovered in the country.
India in the fast lane
The electrification of India’s transport sector is also accelerating the countries’ climate change goals, with billions of dollars being invested. As new infrastructure is put in place (highways, railways, metro lines, airports), the use of EV’s, hydrogen, and other innovative technologies to reduce emissions is essential.
Among the investments includes Taiwanese charging-services company, Gogoro Inc., and Indian automotive systems supplier, Belrise Industries Ltd., who agreed to invest US$2.5B over the next eight years, along with the Maharashtra government, to build stations for EV battery-swapping and charging.
In late June, The World Bank approved US$1.5B in financing to accelerate India’s development of low-carbon energy, promote low-carbon energy by scaling up renewable energy, developing green hydrogen, and stimulating climate finance for low-carbon energy investments.
EV-manufacturer Tesla was also recently cited as likely to make a significant investment into India after PM Modi met with CEO Elon Musk during his visit to the US in June.
The penetration of EVs and other green alternatives into the Indian market has led to an overall decreased diesel demand projection for the near future, setting India on the right path, but more still needs to be done.
In addition, India has signed up to the global EV30@30 campaign that calls for electric vehicles to make up at least 30% of new vehicle sales by 2030. The Indian government also announced ambitious energy transition plans at COP26 to deploy 500 GW of renewable electricity generation capacity by 2030.
These two goals are closely connected. Shifting the country’s vehicles from internal combustion engines (ICE) to EVs will further cut emissions if paired with an accelerated decarbonization of India’s power sector according to IEA Energy Analyst, Zoe Hungerford.
While India’s government has already introduced several EV-friendly policies to boost the competitiveness of domestic EV battery and component manufacturing, even more incentives and support for charging infrastructure will be essential if it is to match countries like the US and its Inflation Reduction Act, or the EU’s Green Deal Industrial Plan.
As for home-grown battery metals mining, the main challenges include establishing proven reserves through exploration, mining, and extraction. The high risk, large amounts of capital, and the regulatory framework all could pose potential roadblocks going forward according to an S&P interview with Federation of Indian Mineral Industries additional secretary general Bhawnesh Kumar Bhatia.