Digging up foreign elements from the Good Ground
Beyond bases and ferrous, the rare earth elements (REE), a group of 17 chemical elements that are found together in the periodic table, deserve some introspection.
By R. Chandra Mouli
The creator of “The Odd Couple” captioned his memoir “Neil Simon Rewrites,” a tongue-in-cheek reference to Hollywood’s penchant for altering scripts. Rewriting a nation’s economic future calls for foiling a bigger plot.
Foil is most appropriate because the realm in question is that of metals, with a drama playing out on the world stage…its genre being a quest for rare earths and precious minerals, in which foreign elements, hidden and overt, compete for dominance.
The target could be stable elements of the periodic table such as iron, copper, zinc and aluminum, so as to create economic instability or an excessive dependence on large producers. Here are some nuggets to support my hypothesis.
Steel: China tops the top 10 list, and India is second, according to the World Steel Association.
Aluminum: China ranks first and GCC countries second, according to the International Aluminum Institute ranking.
Zinc: First is China, and India ranks fifth, according to TheGlobalEconomy website.
The copper: Chile, Peru and China rank among the top 3 copper producing countries in the world, according to a report by NS Energy.
Beyond bases and ferrous, the rare earth elements (REE), a group of 17 chemical elements that are found together in the periodic table, deserve some introspection. Read on if you’re wondering why.
The public sector company Indian Rare Earths Limited has captive units in Kerala, Tamil Nadu and Odisha which together mine and process ilmenite and other associated beach sand minerals such as rutile, zircon , sillimanite, rare earth chloride and a high purity rare earth (HPRE) plant to produce separated rare earth oxides/carbonates.
Natural resources conglomerate Vedanta recently acquired Nicomet, which produces nickel and cobalt, minerals incorporated into electric vehicle batteries and energy storage systems, and is expected to play a role in India’s transition to the clean energy and electric mobility.
While India has its share of rare earths, a global overview can be scary. China controls 70% of the strategic metals market according to a September 2021 Bloomberg report. It accounts for 97% of global rare earth production according to the US Foreign Policy Research Institute. Although China is the world leader in the production of rare earths, it only controls about 36% of the world’s reserves.
Rare earths mined in other countries are sent to China for refining. The reasons could be lower labor costs, generous state subsidies and investments in rare earth mining and processing for more than two decades.
In 2020, monopoly and control became so evident that President Donald Trump signed an executive order “declaring a national mining emergency,” aimed at “encouraging the domestic production of rare earth minerals critical to mining technologies. military while reducing US dependence on China. ”
His successor, Joe Biden, in March 2021 ordered a review of the supply of critical minerals and rare earths, as he realized that the dependence on imports from potentially hostile foreign countries like China creates a risk to national security.
Rare earths are a key input in electric vehicles, battery manufacturing, renewable energy systems, consumer electronics, computers, communications and defense systems. The main use of minerals is in permanent magnets, which are part of telephones, computers, cars, wind turbines and missile guidance systems. To add to the fear and scarcity, the semiconductor industry also depends on rare earths.
Experts say rare earth mining is simple, while separating concentrate into oxide is not, as the process involves technical and environmental challenges. Therefore, a large majority of light rare earth separation is done in China, and almost all heavy rare earth separation is done in China. The separation monopoly has led to China’s dominance of downstream metal, alloy and magnet manufacturing.
In December 2021, China merged three state-owned rare earth mining companies, and the newly formed entity is expected to have such a wide range of rare earths that it has been dubbed “aircraft carrier” by Chinese media. .
An example of a rare earth stronghold taking place in the diplomatic arena: ten years ago, when a Chinese fishing boat rammed two Japanese coast guard vessels in the waters of the East China Sea, the Japanese wanted to bring the captain of the fishing boat to justice, after which the Chinese government retaliated with a threat of an embargo on sales of rare earths to Japan, which would have had an impact on Japanese car production because REEs are an integral part engine catalytic converters.
How did the United States, which is full of rare earths and which was a key player in the 1960s mainly thanks to the Mountain Pass Mine deposits in California, become an importer? In 1997, Magniquench, America’s leading rare earth company, was sold to an investment consortium that included two state-owned Chinese metals companies. Magniquench was closed in the United States, moved to China, and reopened in 2003.
Molycorp, the last major producer of rare earths in the United States, collapsed in 2015 when China continued to lower prices to the point that others could not compete. In recent years, prices for many rare earth oxides rose 500% as China capitalized on its dominant position and began restricting exports. Regularly, Chinese companies buy rare earth resources from other countries. In 2009, China Non-Ferrous Metal Mining Company acquired a majority stake in Lynas Corporation, an Australian company which has one of the highest productions of rare earth elements outside of China, and the Baluba mine in Zambia.
If you’re comfortable reading about the setbacks faced by corporate America, Uncle Sam’s damage control measures, or China’s market grab for metals and rare earths, it’s time to check it out. our own backyard. In India, the strategy works in reverse by placing undue emphasis on companies in the metal production category in which foreign countries wish to gain a dominant position.
Modern coercion is so tactical and subtle that you no longer need a military threat, geographic intrusion, or political movement to achieve an objective. Use a toolbox loaded with missives such as environmental pollution or health risks, make sure the accused appears guilty until proven guilty, turn your own compatriots against progress and regression profits to the tactician.
The next time a manufacturing plant is announced, the next time someone calls for a protest against a working industry, we need to think before we endorse the protest in person or on paper. Because we might be playing the role for free, or you could be helping out a group while raising slogans for a fee.
Last year, our Prime Minister, Shri Narendra Modi, announced a ground-breaking initiative, “AatmaNirbhar Bharat Abhiyaan”, to propel the nation towards self-reliance, with a focus on improving manufacturing capabilities in 10 sectors including electronics/technology products, automobiles and automotive components, telecommunications products, renewable energy and specialty steels.
The problem is that if we have to import the refined metals or essential products to achieve self-sufficiency, the goal becomes counterproductive. Copper, for example, is key to most of the products listed above, and the irony is that India’s largest copper smelter has been closed for three years, turning the country into an importer net.
Let’s switch from copper to COP 26, the United Nations Climate Change Conference held in November 2021. World leaders meeting in Glasgow pledged to reduce the use of fossil fuels to tackle greenhouse gas emissions Greenhouse effect. This means investing in electric vehicles and clean energy systems that require four to six times more copper than conventional sources. If India were to increase the production of green power systems using expensive imported copper, the increased costs would slow their deployment and we are back to ranting about thermal power.
What could be the solutions that the Indian government could consider? Here are a few:
- Create a list of “essentials” and motivate the segment.
- Placing essential metal products for green energy on an equal footing with defense manufacturing.
- Name and encourage companies that can get us faster and closer to our goal of carbon neutrality.
- Monitor these companies, their factories and their processes month after month to ensure they are meeting environmental, social and governance objectives through a panel of experts.
- With the above checks and balances in place, block any attempt to drag producers into a prolonged legal entanglement. This will ward off hidden sutradhars even if they continue their ventriloquist bray.
A well-known Chinese idiom 臥虎藏龙 on which a blockbuster movie was based, denotes a place or situation full of unseen masters. Our scrutiny of global metals trading has revealed an uncanny similarity to the axiom of the market. Let me explain:
In India, we are proud of the tiger as our national animal. Courage is intrinsic to our DNA. As a country revered by the superpowers for its courage and intelligence, we must not remain on the defensive.
Recent media reports of frequent unrest within organizations making globally competitive products indicate that the foreign hand is no longer speculative but operative. If such elements are to be uncovered, we can look for revelation, enlightenment, and deeper meaning in the English translation of the idiom, which sounds innocuous but sums up the plot: “Crouching Tiger, Hidden Dragon.”
(The author is a communications specialist, columnist and former journalist. The opinions expressed are his own.)
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