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21-05-2025
- Business
- Scroll.in
How India could cut its reliance on China for rare earth minerals
Critical minerals, particularly rare earth elements, or REEs, are crucial for the green energy transition. These REEs are a subset of critical minerals, comprising 17 elements in the periodic table (from 57 to 71) starting with lanthanum. They also include scandium and yttrium. Although moderately abundant in the earth's crust, REEs are not concentrated enough for economic exploitation. They play a crucial role in various industries, including defence, electronics, and energy systems, due to their unique properties. Rare earth magnets, for instance, are significantly more powerful than conventional magnets. Alongside elements like lithium, REEs are essential for developing sustainable energy systems, including renewable energy technologies such as wind turbine magnets, electric vehicle motors and solar panel components. Additionally, REEs have diverse applications in healthcare, medical devices, aerospace, and defence. According to the International Energy Agency's 2024 estimate, global REE demand was 93 kilotons (kt), with 18% used in clean technologies. With the ongoing clean energy transition across countries, the demand is expected to reach 180-202 kt by 2050, where clean technology usage is projected to increase to 32%-39%. All countries rely on REEs due to their widespread applications but only a few nations are significant producers and exporters. China's dominance China dominates the global REE market, leading in reserves, production, and exports. According to the Statistical Review of World Energy (2024), China holds the largest REE reserves, with 44 million tons (38% of global proven reserves), followed by Brazil (18%). In 2023, China accounted for two-thirds of global REE production (240 kt out of 356 kt). The United States accounted for 12.2%. Notably, Chinese REE production increased by 14% compared to 2022. China is the largest exporter of REEs, accounting for 64% of global export value and 86% of quantity in 2023. Thailand ranks second, with a 28% share in value and 10% in quantity. Chinese REE exports grew at a compound annual growth rate (CAGR) of 11.6% from 2018 to 2023. In contrast, Japan and Malaysia are the largest importers, with Japan accounting for 57% of global import value and 19% of quantity, and Malaysia accounting for 25% of value and 70% of quantity. The majority of Chinese REE exports (85% by value) are destined for Japan, followed by South Korea (3.5%) and USA (3.2%). China also imports REEs, accounting for 3.5 percent of global import value in 2023, while India's share is only 0.7%. India's REE imports are primarily sourced from China, which accounted for 81% of India's import value and 90% of quantity in 2022. India's REE imports have grown at a CAGR of 10% since 2017, with imports from China increasing by 8% CAGR. Rare earth minerals and energy transition The dependence on REEs for green energy technologies and the concentrated REE supply market have created unforeseen geopolitical implications. Unlike conventional energy markets, which are relatively diversified, the REE market is dominated by a few key players, making it vulnerable to disruptions. As countries transition to low-carbon technologies, they become increasingly reliant on REEs, shifting their energy security risks from fossil fuels to critical materials. For instance, China's 2010 export restrictions on REEs to Japan, due to a maritime dispute, led to a 39% decline (between 2010-'12) in Japan's REE imports from China, along with sharp spikes in global REE price, which impacted various industries in Japan. This incident sparked a debate about energy security risks associated with the concentrated REE market, prompting Japan, the US and the EU to file a dispute settlement case against China at the World Trade Organization. The WTO ruled in favor of the complaining countries, forcing China to withdraw some restrictions. However, this incident highlighted the need for diversified REE supply chains to mitigate energy security risks. To mitigate energy security risks associated with rare earth elements (REEs), countries can consider three alternatives: recycling REEs from end-of-life products, exploring alternative import sources, and investing in research and development (R&D) to improve REE utilisation or develop alternatives. However, each option has its own drawbacks. Recycling is, in general, water and energy-intensive and requires a proper supply chain to collect end-of-life electronic-waste. R&D is financially expensive and time-consuming due to inherent uncertainties. And, alternative import sources are often limited by geopolitical factors. India's rare earth minerals strategy To address the geopolitical risk, India is exploring all three alternatives. Recently, the Indian Ministry of Mines initiated the designing of a Production Linked Incentives scheme to promote recycling of critical minerals. The state-owned Indian Rare Earths Limited was established in 1950 to extract and process REEs and conduct related R&D. The recent removal of IREL from export control list by the US is expected to enhance India's critical mineral supply chain, including REEs. Furthermore, IREL has commissioned a Rare Earth Permanent Magnet Plant in Visakhapatnam, which will produce samarium-cobalt permanent magnets using indigenous technology, with an annual capacity of 3,000 kg. This development is expected to play a crucial role in India's quest for rare earth elements. Further, the formation of Khanij Bidesh India Ltd (KABIL), inclusion of India in the US-led Mineral Security Partnership and amendment s to the Mines and Minerals (Development and Regulation) (MMDR) Act are also proactive measures in this context. Kazakhstan, which has rich reserves of 15 out of 17 known REEs along with established extraction and processing capabilities, offers a promising alternative for India to diversify its REE imports. Strategic partnerships with Kazakhstan can help India reduce its dependence on China, leveraging geographical proximity and geopolitical stability. Kazakhstan is not only India's largest trading partner in Central Asia; India also has defence cooperation and civil nuclear agreements with Kazakhstan. Moreover, Kazakhstan has established relationships with major global partners, including the US, Japan, South Korea and the EU, demonstrating its commitment to reliable REE supply. The India-Central Asia Rare Earths Forum is exploring collaborations for joint mining ventures through private sector investment. Despite technical challenges, such as geographic hurdles and limited advanced extraction technologies, ICAREF aims to address these issues and establish a regional REE market for mutual benefit, facilitating a smoother transition to renewable energy with reduced dependence on China. Saswata Chaudhury is Senior Fellow & Area Convenor, Energy Assessment and Modelling Division, The Energy and Resources Institute, New Delhi.
Reuters
10-04-2025
- Business
- Reuters
China trade spat undermines Trump's ‘max pressure' Iran campaign: Bousso
LONDON, April 10 - The deepening trade war between the United States and China could significantly undermine President Donald Trump's "maximum pressure" campaign against Iran, which earns tens of billions of dollars in revenue annually from oil sales to Beijing. Since taking office in January, Trump has ratcheted up pressure on Iran in a bid to stop it from obtaining a nuclear weapon, an ambition it denies harbouring. Washington has sought to drive Tehran's oil exports down to zero, cutting off a major source of revenue for the Islamic Republic. That's a tall order. The United States and the European Union have for years targeted Iran's oil exports with limited success. The OPEC member's oil production rose to 4.6 million barrels per day in 2023, the highest since 2018, according to the Energy Institute's Statistical Review of World Energy, opens new tab. But Trump is clearly willing to up the ante. He recently threatened to bomb Iran and impose secondary tariffs on buyers of its oil if Tehran does not agree to a nuclear deal. The U.S. administration also issued a string of sanctions against Chinese entities involved in crude trading and, for the first time, targeted Chinese "teapot" refineries – small, independent plants – that process Iranian crude. Beijing accounted for at least 77% of Iran's roughly 1.6 million bpd of exported crude in 2024, according to analytics firm Kpler. The value of Iran's crude sales to China is not officially disclosed, but a Reuters calculation puts the trade at nearly $29 billion last year, assuming a 20% discount to the Brent crude prices to include costs of logistics. Washington thus clearly understands that any effort to choke off Iran's oil exports will have to involve persuading, or coercing, China to halt the oil trade. But doing this will be much more challenging now, given the rapid deterioration in relations between the two trading partners. They have exchanged tit-for-tat tariffs over the past few weeks, culminating in Trump's announcement on Wednesday that he would raise tariffs on Beijing to an eye-popping 125%, dwarfing China's newly announced 84% tariff on U.S. goods. So what could Trump try to do? While China officially does not import any crude oil from Iran, its independent teapot refineries have for years circumvented international sanctions on Iranian oil exports and shipping using an opaque web of shell companies and tankers. So, in theory, more of these small refineries could be targeted. But as the recent U.S. sanctions on Shandong Shouguang Luqing Petrochemical Co., Ltd have shown, such actions are likely to have a limited impact since many of these China-based plants' operations are domestic. Secondary sanctions on Iranian crude are also unlikely to faze China, considering the extraordinarily high tariff barriers Trump has already erected. Once a country is facing tariffs exceeding 100%, the threat of additional penalties has little bite. If Washington is incapable of limiting Iran's oil revenue by a meaningful amount, then it is fair to assume that the key lever in Trump's "maximum pressure" campaign won't be financial. That doesn't necessarily mean Trump will pursue a military conflict with the Islamic Republic, though the administration has taken several actions – including moving six B-2 heavy bombers to the Indian Ocean – which appear designed to signal that the threat is real. But the Republican president this week also made a surprise announcement that the United States and Iran were poised to begin direct talks. Iran's foreign minister later said the discussions in Oman would be indirect. Either way, tensions between Washington and Tehran continue to rise, and this could ultimately give Chinese President Xi Jinping leverage in his own battle with Trump. He could use Iran's dependence on China as a bargaining chip in any future negotiations with the U.S. about defusing their trade tussle, as it is unlikely that Trump would want to pursue a trade war and an actual war simultaneously. ** The opinions expressed here are those of the author, a columnist for Reuters. ** Want to receive my column in your inbox every Thursday, along with additional energy insights and trending stories? Sign up for my Power Up newsletter here.
Yahoo
24-02-2025
- Business
- Yahoo
The Debate Over Big Oil's Role in Climate Change
Some believe that 'Big Oil' should be held financially accountable for climate-related disasters, such as California's wildfires. Their rationale? Major oil and gas companies are profitable and have contributed significantly to atmospheric carbon emissions. A recent press release—'Chevron & Exxon could easily cover LA wildfire damages'—claimed that 'mega-rich oil firms like Chevron and Exxon are knowingly driving and profiting from the climate crisis.' Two California lawmakers have even introduced legislation to enable lawsuits against these companies. But do these claims hold up under scrutiny? 'Big Oil' typically refers to the five largest integrated supermajor oil companies: ExxonMobil, Chevron, Shell, BP, and TotalEnergies. Their combined production in 2023 was: ExxonMobil: 2.4 million barrels of oil/day, 7.7 billion cubic feet of natural gas/day Chevron: 1.5 million barrels of oil/day, 7.1 billion cubic feet of natural gas/day TotalEnergies: 1.55 million barrels of oil/day, 6.8 billion cubic feet of natural gas/day Shell: 1.39 million barrels of oil/day, 9.73 billion cubic feet of natural gas/day BP: 1 million barrels of oil/day, 6.9 billion cubic feet of natural gas/day Using standard emissions factors (0.43 metric tons of CO? per barrel of oil and 0.0547 metric tons per thousand cubic feet of natural gas), the total annual CO? emissions from their products amounted to 1.99 billion metric tons in 2023. Total global carbon dioxide emissions from fossil fuels and industry in 2023 were approximately 37 billion metric tons. That means Big Oil accounted for just 5.4% of global CO? emissions. Moreover, fossil fuel combustion as a whole contributed 87% of global emissions, with oil and natural gas responsible for about 60% of those emissions. The remaining 40% came from coal—a fuel that oil companies do not generally produce. To argue that Big Oil should be held primarily responsible for climate-related disasters, one must accept three questionable premises: Companies responsible for just 5.4% of total emissions should bear the bulk of the blame, while ignoring other major contributors, including coal producers and nationalized oil companies. Producers, not consumers, are responsible for emissions. Oil companies extract and refine fossil fuels, but consumers—individuals, businesses, and governments—burn them (while deriving benefit from doing so). A handful of Western corporations should be punished despite accounting for only a fraction of global fossil fuel production. The vast majority of oil and gas production comes from national oil companies, such as those in Saudi Arabia, Russia, and China. According to the Statistical Review of World Energy, the U.S. was responsible for 13.2% of global fossil fuel emissions in 2023. When accounting for all the carbon dioxide emissions of the past 60 years—before Asia-Pacific's rapid industrialization—the U.S. share rises to 24.5%. Even if one were to irrationally blame oil companies alone, their share of total emissions is a small fraction of that number. Blaming oil companies for climate change ignores an inconvenient truth: we are all responsible. Every country, company, and individual who uses fossil fuels contributes to carbon emissions. A transition to cleaner energy will require coordinated global efforts, not selective punishment of a handful of Western firms. Even if you believe Big Oil misled the public, the broader scientific and policy communities were never dependent on oil executives for climate science. The potential consequences of rising CO? levels were well-documented in scientific literature long before climate lawsuits became a political tool. If lawsuits against oil companies are justified, then logically, every consumer, airline, shipping company, and government that relied on fossil fuels for economic growth should be held accountable. The state of California profited enormously over the past 100 years from fossil fuel extraction. But such an approach would be impractical and economically disastrous. Suing oil companies won't slow carbon emissions. It may score political points, but it does nothing to address the underlying issue. Instead of lawsuits, we need practical solutions that recognize the shared responsibility of producers, consumers, and policymakers alike. By Robert Rapier More Top Reads From this article on
