The Government of India, recognising the importance of minerals to its economic development and zero-emission targets, recently announced the list of “critical minerals for India” to ensure reduced import dependencies and enhance supply chain resilience.
From a slow lane, sales of electric vehicles (EVs) in India has picked up the pace, accelerated by a rapid increase in supporting infrastructure such as charging stations, a sharp drop in renewable energy prices, and buyers’ growing preference for a sustainable lifestyle. At 12.5 lakh, sales of EVs grew by a whopping 174% in FY23 over FY22, taking the tally of EVs on roads to 23.4 lakh, as of March 2023.
Evidently, EVs as a mode of sustainable mobility has struck a chord with consumers. According to Vahan data, EV sales exceeded the 1.5 lakh mark for the first time in the country in May this year. EV sales were over one lakh each month for the last eight consecutive months. At this pace, the government’s target to reach about 30% of the vehicle population by 2030 should not be difficult to achieve, provided the necessary supports are in place.
One of the most pertinent needs to achieve this target is to ensure the supply of the requisite raw materials for the industry. According to our estimates, while it requires an average of 15 kg of copper for a conventional car, the requirement rises to 68 kg for manufacturing every electric car. Similarly, on average, 1.3 kg of copper is required for a conventional 2-wheeler, whereas an electric 2-wheeler requires an average of 4 kg of copper.
The current dispensation had in 2015 set an ambitious target of pruning import reliance on oil and gas from 77% to 50% by 2030. The Ministry of New and Renewable Energy is committed to achieving 500 GW of installed electricity capacity from non-fossil fuel sources by 2030. The current installed capacity is around 169 GW. Renewable energy systems require four times more minerals than traditional energy systems. The shift to a clean energy system will enhance the requirements for minerals such as copper and others. Copper is one of the few materials that can be recycled all over again without any performance loss. Copper is also a highly efficient conduit.
Unfortunately, domestic copper production has, in recent years, failed to meet the rising demand. For the last five years, India’s copper imports have been only increasing, draining the hard-earned Forex and posing a huge threat to India’s net-zero targets.
In the not-so-distant past, India was a net exporter of copper. The role reversal took place following the closure of Sterlite’s Tuticorin smelter in May 2018. India’s copper imports skyrocketed to touch an all-time high in FY23. The country, which was a net exporter of refined copper in 2017-18, imported 1.8 lakh tonnes of copper in FY23 compared with just 44 thousand tonnes in FY18. Exports of refined copper, on the other hand, fell to a record low of 30 thousand tonnes during the year. The gap in the supply of domestic refined copper has been filled by increased usage of copper scrap amounting to over 3.5 lakh tonnes in FY23.
Total copper demand in the country, on the other hand, increased to touch an all-time high of over 13 lakh tonnes in FY23, gaining traction from growth in building construction, renewable, transportation, power infrastructure and consumer durable sectors.
Recently, the European Union (EU) placed exemplary importance on copper by bringing it under the list of critical raw materials. The block’s landmark legislation was aimed at establishing a framework for bolstering supplies & reducing imports. This would also expedite permitting and financing of these metals, the key to the energy transition, within Europe.
Managing Director,
International Copper Association, India
The Government of India, recognising the importance of minerals to its economic development and zero-emission targets, recently announced the list of “critical minerals for India” to ensure reduced import dependencies and enhance supply chain resilience.
The list has been designed to identify and prioritize minerals essential for various key sectors’ growth, such as high-tech electronics, telecommunications, transport and renewables. The list will serve as a guiding framework for policy formulation, strategic planning and investment decisions in the mining sector.
A Parliamentary standing committee in August last year suggested that the government incentivise the capacity addition of copper as the demand for the metal would rise in coming years.
