23 January 2025 : The Hindu Editorial Analysis

1. China’s moves must recast India’s critical minerals push

(Source – The Hindu, International Edition – Page No. – 8)

China’s Export Control Strategy

• On January 2, 2025, China’s Ministry of Commerce expanded its export control list, adding 28 U.S.-based entities.
• These restrictions target minerals crucial for high-tech applications, including tungsten, gallium, magnesium, beryllium, hafnium, and lithium-6.
• These minerals are essential for industries like semiconductors, aerospace, batteries, and advanced electronics.
• China has strategically weaponized its critical mineral exports in the past, including:
  • A rare earth minerals embargo against Japan in 2010.
  • Restrictions on antimony, gallium, and germanium exports in recent years.
  • A ban on rare earth extraction and processing technologies in December 2023.
• China carefully balances these actions to avoid harming its domestic industries and sectors reliant on Western raw materials.

Global Implications and India’s Position

• The competition for critical minerals has become a focal point in international economic diplomacy.
• Nations like the U.S. are increasingly concerned about China’s control over critical minerals.
• For India, these developments highlight the need to improve domestic mineral exploration and production capacity.

Challenges in India’s Critical Minerals Push

• In 2023, significant lithium deposits were found in Jammu and Kashmir’s Reasi district.
  • However, no companies have bid for these resources, and the block remains unutilized.
• Between 2015 and 2024, only 48% of mineral blocks available for auction in India were successfully auctioned.
• Despite reforms introduced by the Indian government, the results remain underwhelming.

Government Initiatives and Reforms

• The Ministry of Mines identified 30 critical minerals essential for national security.
• The government established Khanij Bidesh India Ltd. (KABIL) to secure overseas investments in minerals like lithium and cobalt.
• The Mines and Minerals (Development and Regulation) Amendment Act, 2023:
  • Lifted restrictions on some rare earth elements classified as atomic minerals.
  • Introduced an ‘exploration license’ to attract resource exploration agencies, including foreign firms.
  • Promised a reimbursement of 50% of exploration costs after mining begins.

Reasons for Limited Progress

• India’s resource classification system is outdated, making it hard for miners to assess the commercial value of blocks.
• Many auctioned mineral blocks lack advanced exploration data, making them riskier investments.
• Despite incentives, there is low demand for exploration licenses.

Suggestions for Improvement

• High-quality geological data is crucial to bridge the information gap between the government and potential investors.
• Upfront fiscal incentives during the exploration phase, similar to the semiconductor industry, could attract more investments.
• Direct capital support early in exploration could offset costs and unlock significant value in downstream mining and exports.

Conclusion

• China’s strategic control over critical minerals highlights the importance of securing domestic resources.
• India must prioritize advanced exploration, improve data quality, and offer upfront fiscal incentives to attract investments.

2. The rest of the world must reassess the U.S.’s role in fighting climate change

(Source – The Hindu, International Edition – Page No. – 8)

U.S.’s Greenhouse Gas Emissions

• This move casts doubt on global climate commitments, especially as the Earth has exceeded the 1.5°C warming mark for a full calendar year.
• The U.S. is the world’s second-largest emitter of greenhouse gases and is viewed as a global leader in addressing climate change.

Inconsistencies in U.S. Climate Policy

• Both Republican and Democratic administrations have prioritized business interests in domestic climate policies.
• Despite climate commitments, oil and gas production in the U.S. has increased, making it the largest global producer of crude oil and gas.
• In 2022, the U.S. became the largest exporter of liquefied natural gas (LNG).

Shortfalls in Emission Targets

• The U.S. has achieved only one-third of its 2030 greenhouse gas reduction targets as of 2022.
• President Biden committed to a 61%-66% reduction in emissions by 2035, which experts believe is insufficient to meet the 1.5°C global warming target.

Future Prospects

• Renewable energy investments have grown significantly, limiting the extent of policy rollback.
• While formal withdrawal will take a year, U.S. engagement in global climate forums like COP 30 in Brazil may persist.
• Trump’s approach suggests a dual strategy, balancing domestic interests while engaging selectively in international climate discussions.