Diversify critical mineral supply chain or face disruption: IEA

Time of India

2 days ago

The
International Energy Agency
(IEA) on Monday cautioned that the concentration of critical mineral mining and processing in a few hands could affect global prices and supplies, while also suggesting that India should incentivise green mobility to reduce its vulnerability to high oil prices.
"The world is entering a stage where the trade flows are not necessarily based on established WTO rules, but it is a different context. When we look at critical minerals, which are key for energy transition, but also key for defense, AI, manufacturing, chips, we are seeing a major concentration. This is a worry, because we at the IEA believe that the best energy security policy is diversification... my appeal to all the countries around the world (is to) try to diversify mining, refining and processing of key critical minerals otherwise, we may have unintended consequences of supply disruptions," IEA executive director Fatih Birol said after a meeting with commerce & industry minister Piyush Goyal.
China is the most important miner and processor of critical minerals such as lithium and the trade war has raised fears of supply disruptions and price increase as the US mounts pressure on Beijing.
Asked about the transition to electric vehicles and the need to offer incentives, he said: "Countries, especially those which import oil, should consider incentives for electric cars to reduce imports... depending on the countries, the financial balances in some countries can be more generous. In some countries less generous, but there is a need, at least for the time being, to support the consumers in terms of buying their first electric cars. India should look at the electrification of mobility very closely, because currently we have low oil prices... If India wants to have an upper hand in terms of domestic oil trajectories, electric cars are one of the key solutions."
He also said the economics supports EVs. "In many countries, electric cars and commercial cars have the same prices. "Plus, in most countries around the world, if not all, driving one kilometer of a car is cheaper with electricity than the oil prices, unless oil prices go below $50 (a barrel). Sooner or later, electric cars will be dominating the streets."
Birol was all praise for India's green energy transition as well as initiatives such as Ujjwala and LED bulbs. "In India, there was $1 investment in clean energy, there was $1 investment in fossil fuel. Today, for every $1 going to fossil fuels there is $4 for clean energy. India is a huge, huge, huge success story... This is good for India's economy, good for India's energy security and good for the world."