Time for India to be Atmanirbhar
Whether the dependency is on food or energy, the clarion call is clear
image for illustrative purpose
Copper is 'the new oil'
• India needs to ensure domestic self-sufficiency in metals and minerals such as copper production in the new scenario of high commodity prices for clean energy transition, growing infra needs
• Govt's strategy should be to lessen the volatility in global prices of Metals to insulate our industry from such ups and downs
• Any delay in ensuring self-sufficiency could mean missing out on an opportunity to become a global leader in the green energy transition
New Delhi: The Covid-19 pandemic has brutally exposed the fragility of the world's supply chains and the dangers of being dependent on any single country to meet one's needs. Whether the dependency is on food or energy, the clarion call is clear. It is time for India to achieve 'Atmanirbhar Bharat', ensure greater reliability and resilience so that the country is no longer dependent on certain geographies.
To realize this dream, it's important for India to become a global player in sustainable future technologies like electric vehicles (EVs) and renewable energies. India already has an ambitious target of converting 30 per cent of private cars, 70 per cent of commercial vehicles, and 80 per cent of two-and three-wheelers into EVs by 2030. According to the Centre for Energy Finance (CEEW-CEF), the EV market in India will be a $206 billion opportunity by 2030. Similarly, in the space of renewable energy - wind and solar - India has an ambitious target of generating 450 GW of power.
However, such transformation is only possible if there is an adequate regular supply of various minerals and metals, especially copper. A metal like copper with diverse properties such as high flexibility, conformity, thermal and electrical conductivity, and resistance to corrosion will drive global demand across sustainable technologies.
"While it is true that we cannot be self-sufficient in every metal or mineral, the government's strategy should be to lessen the volatility in global prices to insulate our industry from such ups and downs, such as acquiring mining leases abroad. That has become even more important in the current geopolitical situation where supply chains have been disrupted," says Sunil Kumar Sinha, Principal Economist, and Director of Public Finance, India Ratings, a rating agency company.
For instance, the advent of EVs and new-age batteries will require much more copper compared to traditional cars. According to a Copper Development Association report, hybrid electrical vehicles (which runs both on batteries and gasoline engines) will require 85 pounds of copper, while plug-in-hybrid vehicles will require 132 pounds, and battery electric vehicles, which runs only on batteries, will require 183 pounds of copper compared to 18-49 pounds for a gasoline engine car.
The EV ecosystem too will demand a high amount of copper, especially the charging stations as the wires used to connect the charger to the electrical panel as well as the charging cable itself are made of copper. Global research and consultancy firm Wood Mackenzie estimates that by 2030, there will be over 20 million EV charging points globally catering to nearly 11 per cent of new car sales. This will result in 250 per cent more copper consumption compared to 2019.
Hence, long-term prospects for copper remain bullish. As argued by Goldman Sachs "despite China's property slowdown, the gains from EVs, renewables and electrical network investment outweigh the policy-moderated drag from property and machinery". With long-term demand likely to outstrip supply, prices of copper have been rising. Global banks like Goldman Sachs expect copper prices to touch $12,250 per tonne in the fourth quarter of 2022. Such record prices should serve as a wake-up call for India. Thus, it is extremely important for India to ensure domestic self-sufficiency in metals and minerals such as copper production in the new scenario of high commodity prices, especially if India wants to effectively control its clean energy transition and growing infrastructure needs. Any delay in ensuring self-sufficiency could mean missing out on an opportunity to become a global leader in the green energy transition.
