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A few days ago, global news outlets covered the discovery of 5.9 million tonnes of Lithium (Li) reserves found in Jammu and Kashmir. To put this in perspective, the discovery ranks India as the sixth highest Lithium producer in the world. Known as the ‘white gold of energy storage technology’, Lithium is one of the key components used in electric batteries. Besides EV, Lithium-based semiconductors are also playing a key role in areas of national security, nuclear medicine, and other scientific research.
As with other supply chain sectors, China currently commands a dominant position in Lithium battery production, accounting for approximately 40% of global supply. It is also increasingly likely that the next decade will witness a similar scenario to the semiconductor shortage, with the emergence of a potential Lithium shortage.
However, it is worth noting that this discovery was made 26 years ago when the Geographical Survey of India (GSI) released a report identifying substantial Lithium deposits in the same area. Unfortunately, there has been minimal follow-up action taken since the report’s release.
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Cut to present, the “recent” discovery—like what happened previously—is also in the preliminary stages of investigation, which implies that it only reflects on the estimated quantity of the mineral based on geographical evidence and does not necessarily indicate the feasibility of mining operations in the area.
The question mark on the feasibility also has to do with the impact that Lithium extraction has on the environment. A report from Friend of the Earth (FoE) highlights that Lithium extraction will inevitably lead to soil degradation and contamination of air. As the demand for Lithium increases, it will harm communities where the extraction occurs as it will restrict their access to water, considering about 2.2 million litres of water is required to produce one tonne of Lithium.
Semiconductor Industry has a carbon problem
However, there is a bigger problem looming. It is not just Lithium, the semiconductor industry on a whole is going through a carbon emission problem. The little silicon chips that power everything, from our smartphone to electric car to solar arrays, also happen to be massive energy and water hogs. We’re talking about gallons of water a day and hazardous waste kind of hogs here.
In fact, a Harvard University research from 2020 shows that chip manufacturing “accounts for most of the carbon output” from hardware systems. The research claims that over half the operational carbon output comes from GlobalFoundries, Intel, and TSMC, mainly due to PerfluoroCarbons (PFCs), chemicals, and gases.
The environmental effects of chip manufacturing were also contributing factors in why semiconductor production moved from the US to China half a century ago. The US used to be a leading producer of rare earth elements (REEs), such as neodymium, yttrium, and terbium, which are vital materials in smartphones, wind turbines, and electric vehicles. Concerns over environmental issues around radioactive waste disposal is what led to the production moving to China, where regulations were relatively more relaxed.
Result? China now controls over 80% of the production of rare earth elements.
US ‘Dumps’ Everything in India
As countries increasingly establish their own semiconductor facilities or outsource production to “friendly” nations, the critical question of who bears the burden of environmental responsibility arises. It won’t be surprising if the tag of the ‘fastest growing economy’ might be synonymous with being a dumping ground of semiconductor waste, just so the West sees India as a strong candidate for its ‘China+1’ strategy.
This is what happened with e-waste and is highly likely to repeat with semiconductor waste as globally developed countries look to accelerate their semiconductor production.
A 2021 study published in Sustainability indicated that the majority of the waste from the electronics industry—which can be sourced to developed countries—is getting accumulated in India, and a lack of suitable regulation is only enabling that further. Their research cited United Nations Environmental Programme (UNEP) data which suggested that only 10% of the e-waste produced in the world today is recycled in developed countries and the remaining 90% is sent to developing countries across the globe.
Conversely, there is also a desire on the Indian side to sit at the big boys’ table.
Take the case of the Minerals Security Partnership (MSP), an initiative led by the United States and consisting of 11 nations with the objective of securing the supply chain of critical minerals. However, India was not included in the partnership, reportedly due to its lack of expertise in the field. Since then, there has been an overwhelming feeling of being left out expressed by government and media channels alike.
The omission led the government to get in the minerals circle through diplomatic channels to fetch an entry.
Additionally, there have also been ongoing efforts from media channels to showcase the country as a valuable source of critical minerals. For example, several reports have emerged in recent times which position India as a “rich source of rare earths”—carrying nearly 6% of the world’s reserves but utilising only 1%. These reports called for mining reforms that would enable the private sector to extract these minerals. Some have also emphasised on a stronger US–India collaboration that could get India a seat at the table.
While the question of India’s inclusion in the Minerals Security Partnership (MSP) remains to be answered, the United States has demonstrated an awareness of India’s potential contribution by highlighting rare earth processing technology as an area for future cooperation in their recent statement.
India appears to be moving in two opposing directions at present. On one hand, it is striving to achieve a 45% reduction in emission intensity by 2030, signalling its commitment towards mitigating climate change. On the other hand, it is also actively working towards establishing itself as a significant player in the global semiconductor industry, which often involves energy-intensive manufacturing processes and may lead to increased emissions. This evidently suggests a possible conflict between India’s climate goals and economic ambitions, and highlights the need for the country to strike a balance between sustainable development and industrial growth.