A mad rush – Issue #53
Oil fades, critical minerals rise. Australia's lithium boom, Indonesia's nickel plans, and the complexities of EV mining technology.
News of the week
Oil is passe. Critical minerals are the future.
And so, last week, came further snapshots of the new world we are all moving towards.
Western Australia made $910 million from lithium exports this year. As this report in The West Australian said, between iron ore and lithium exports, the province has a bigger operating surplus than other parts of Australia.
The implications are interesting. As in India, there are concerns that the province’s financial gains might result in “political disagreements between states on sharing GST”. Within the province, political bickering is underway on whether this money is being used well. Currently, while a part of this money is going as electricity credits to households – and the rest is going into energy (batteries, wind), infrastructure projects, and social infrastructure (social housing, hospitals) – wages are yet to keep pace with inflation.
Australia currently exports lithium ore to China – but is scouting for ways to purify lithium on its own. Indonesia is following a similar path. It, too, wants to capture maximal value from its critical mineral deposits -- in its case, nickel. And so, last week, the Washington Post reported on the environmental costs of the country’s plans to use acid-leaching to purify nickel.
It’s a familiar bind. Indonesia's saprolite reserves, which can be extracted in less-polluting ways, are running down. To capitalise on the EV boom, the country now has to work with lower-grade Limonite ore. And so, acid-leaching.
A clutch of questions rears their heads here. Is EV mining technology not progressing as fast as other parts of EV technology? As we saw last week, the customers for cleaner mining technology are often poorer countries like Congo, Bolivia and Indonesia – and so, are those research dollars chasing more remunerative questions? In which case, as books like Cobalt Red show, we will end up with supply chains that are modern only at the top.
Also came news that US-based Livent Corp. has agreed to combine with Australia’s Allkem Ltd. This merger will create, said Bloomberg, the world’s third-biggest Lithium producer with a supply chain spanning the Americas, Australia and Europe. We also learnt that Tesla is setting up its own lithium refining unit. “As we look ahead a few years, a fundamental choke point in the advancement of electric vehicles is the availability of battery grade lithium," said Elon Musk.
One wonders how all this will play out. China isn’t just controlling purified lithium supplies. It’s also using its scale to drive down prices of electric vehicles – and exporting them worldwide. Will the story of cheap Chinese solar panels repeat itself?
In India too, critical minerals are the new holy grail. A full third of its exploration activities, the Geological Survey of India said last week, are now dedicated towards finding these. The organisation, one learns, has forged a working collaboration with Geoscience Australia for mineral exploration and is in talks for tie-ups with the authorities in Russia and Brazil.
Continuing with energy transition, India's state-run oil and gas companies, said the Economic Times, are targeting to build a combined green hydrogen generation capacity of 38,000 tonnes per annum by the next financial year. Also emerged news that an oil ministry panel wants India to “ban the use of diesel-powered four-wheeler vehicles by 2027 and switch to electric and gas-fuelled vehicles in cities with more than a million people and polluted towns in order to cut emissions”.
It’s not clear if this will happen. As Reuters reported, “It is not clear if the petroleum ministry will seek cabinet approval to implement the recommendations of its Energy Transition Advisory Committee, headed by former oil secretary Tarun Kapoor.” The market, however, might move in that direction on its own. An e-retro fitment industry – replacing the internal combustion engine with an electric powertrain – is emerging in the country.
“Retrofitted Maruti Gypsies were showcased at the Army Commanders’ Conference held in New Delhi last month,” reported Down To Earth. “These were... turned into electric vehicles by a collaboration of the Indian Army Cell, IIT Delhi and a start-up named Tadpole Projects.”
Elsewhere, India’s nuclear push continues to make headlines. Another report suggests India wants to make a parallel push on both large-capacity reactors and small and modular reactors. “While the Niti Ayog driven focus on nascent SMR (smaller modular reactor) technology is on the table, the plan clearly is to pursue large capacity reactors with NPCIL and build SMRs with private partners,” wrote the Free Press Journal.
In the middle of all this, however, coal exploration also continues. Coal India has worked out a 52-mine plan for meeting its production target of 1 billion tonnes of coal production by 2025-26, reported Business Standard. “Of these, 13 are new coal mines; the rest are expansions of existing ones. Jharkhand leads the pack with 15 new mining projects, of which three are new; the rest are expansions of existing coal mines in the state. Chhattisgarh follows it — it will have eight new coal mines.”
Also came news that the Coal Mine Planning and Design Institute has found two large coal blocks in Bihar. Mirzagaon and Lakshmipur, both in Bhagalpur district, have estimated reserves of 2.3 bn tonnes and 1.03 bn tonnes, respectively.
In other news, one more cheetah that shifted last year from southern Africa has died. Goa is mulling reforestation after those puzzling forest fires. Larsen & Toubro is amping up its investments in self-driving and electric vehicle technologies. ISquared Capital is partially exiting its investments in City Gas Distribution. Mubadala Investment, the sovereign wealth fund of the United Arab Emirates, and a couple of Japanese investors, including Sumitomo, are in the race to acquire its stake.
Madhya Pradesh plans to develop ten cow sanctuaries on forest land, accommodating over 50,000 cows. These will come up on 6,700 sq kms of forest area – and accommodate more than 50,000 cows. Hindustan Times quoted a state official: “The state has over 94,000 sq km of forest area of which 63,000 sq km is reserved forest. We don’t have any shortage of forest land for cows.” Ten per cent of the state is forest land.
And then, there is Gautam Adani. Three-and-a-half months have passed since Hindenburg released its report. The fallout continues. “Global index provider MSCI has dropped two Adani Group stocks -- Adani Total Gas and Adani Transmission -- from its India benchmark after revising its estimations of how many shares in the companies are freely tradeable,” reported The Financial Times. It’s the latest blow to befall the group, said the financial daily.
Trying to boost investor confidence, the group said it would prepay USD 130 million of debt. It also seemed to contradict itself on plans of raising debt for future growth. A week after announcing plans to raise $800 million for Adani Green, the group said it would avoid debt. “The promoters of Adani Group have decided they will not raise further debt on their books to fund the conglomerate’s expansion and growth,” reported Business Standard.
The group will, instead, try and raise Rs 21,000 crore by selling equity to a few financial investors as a qualified institutional placement. On the whole, though, the group is scaling back.
“The company has told investors and market analysts that its headlong growth — into new sectors including media and data centres — is on pause,” reported FT.
The only new project where it has bid is the Great Nicobar Transhipment project.
Podcasts of the week
Climate long-reads of the week
How Latin America Can Beat the Resource Curse(Washington Post)
The Last Remaining Bustards Of Gujarat (Indiaspend)
From Odisha to Kerala, a bus of climate migrants. “Over the next two days, the bus travelled 2,000 km from Sahani’s village, Bagapatia in Odisha’s Kendrapara district, to Ernakulam district in Kerala, tracing a long arc between India’s eastern and western coasts... The bi-weekly bus is an outcome of a complex set of forces, which centre around climate change and cyclones, that have pushed the people of Bagapatia away from their homes to workplaces thousands of kilometres away.” (Scroll.in)
Central banks raising interest rates makes it harder to fight the climate crisis (Guardian)
In India, A Nuanced View of How Elephants Make Decisions (Undark)
Log9 is making India's first EV cells. Can it take on China? (Forbes India)
FAME-II controversy can scare off investors. India’s EV sector had just started to grow (The Print)
Books of the week
Three books are worth flagging this week.
The first is War On The Whales, by Joshua Horwitz.
Here, he recounts the battle by whale conservationists and environmental lawyers to rein in the US Navy’s use of sonar frequencies harmful to whale populations. This is a tale of slow progress, but one where the all-powerful US Navy is eventually held to account.
Apart from this, two new books – about energy and adaptation – look interesting. The first is on how the global oil economy reshaped the Caribbean. The second is an ethnography of COP climate negotiations, with a focus on the Bangladesh delegation