K Srinivasan
IF you haven’t heard of tungsten, tellurium, bismuth, indium and molybdenum, you better get used to these names. Not just these, also samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium. If you’re wondering what these are; they are the rare minerals of which China has a 70 per cent control. On April 4, it placed export restrictions on these as part of its sweeping response to US President Donald Trump’s tariffs. The fallout will be a tightening of supply to major companies that manufacture weapons, electronics and a range of consumer goods.
Lockheed Martin, Tesla and Apple are among the US companies that use Chinese rare earths in their supply chains. According to Reuters: ‘’two industry sources said Chinese export restrictions on some rare earths are a concern for some US aerospace manufacturers because they are sole-sourced from China for use in avionics. RTX (Raytheon Technologies) and Honeywell declined to comment.
Boeing and GE did not respond to requests for comment. The US Government has stockpiles of some rare earth, but not enough to supply its defence contractors in perpetuity. Beijing has already imposed outright bans on the export of three metals to the US and slapped export controls on many others.’’
The critical minerals fall under multiple categories.
Rare earth elements (REEs) are crucial for the production of strong alloys that are used in aircraft engines and missiles.
Gallium is at the heart of semiconductors that are the soul of all electronic systems, such as navigation, communication and flight control systems.
Cobalt is used to produce superalloys and battery cathodes and q Hafnium is used as an element in creating high-temperature alloys. The selection of these raw material is based on their exceptional performance characteristics, such as strength, resistance to heat, and corrosion. Replacing them is not a straightforward task, as it would likely lead to a decline in the performance of the components.
Alternative sources
While the US Government has stockpiled a considerable amount of these rare minerals and metals, thanks to the war in Ukraine and tariff conflict with China, it will have to quickly find alternative sources, including those in South Korea. Sangdong, a sleepy town 115 miles southeast of Seoul, is believed to be one of the largest sources of tungsten, with 8.7 million tonnes of proven and probable reserves. As Newsweek reported, “Sangdong could re-establish South Korean tungsten on the world stage and serve as a prime example of US ‘friend-shoring’ of essential resources.”
While all this is still in the works, will OEMs in Europe, America and South America suffer as a consequence of this trade war and how much will it impact production and deliveries? Unlikely in the near future, considering the stockpiling that has happened in the last couple of years. But if the tariff war drags on, and if the screws are tightened further, then one doesn’t know if it will just be a global recession but also a production nightmare – with supply chain woes and delayed deliveries – not just aircraft but avionic, missiles and what have you.
India’s baby steps
So where does India fit into all this? The Geological Survey of India’s Central Geological Programming Board (CGPB) is working double time on it. According to Fortune India: “CGPB formulated 115 projects on strategic & critical minerals (including 16 on fertiliser minerals). Of these, 81 aim to identify deposits of strategic minerals, including lithium, cobalt, nickel, molybdenum, vanadium and light rare earth elements (REE) where India is almost 100 per cent import-dependent today.’’
As the perceptive piece explains, “The aim of these baby steps is securing the supply of products whose demand from transportation sector alone is estimated to grow 51 times (lithium), 31 times (cobalt) and 20 times (nickel) by 2040. Demand for some of these could rise even further if ambitious plans for wind and solar energy capacity addition materialise.” The fact of the matter is it, India has an almost negligible presence in the global rare metals and minerals supply chain. For an economy which hopes to position itself as the third largest by 2030 and a powerhouse manufacturing destination, there is not a minute to waste in sourcing and securing these rare, but almost invaluable, minerals for our economic wellbeing.
