Critical minerals push to benefit battery-makers, electronics firms


The budget proposal for the critical minerals mission is expected to encourage local manufacture of battery cells and increase domestic value addition, especially since an 18,100 crore production-linked incentive (PLI) scheme for advanced chemistry cells (ACC) is nearly exhausted. Early gainers may include companies already approved under the ACC PLI such as Ola Electric Mobility, Reliance New Energy and Rajesh Exports. Others who are waiting for PLI approval include Amara Raja’s advanced cells subsidiary, JSW Neo Energy and Waaree Energies.

On Tuesday, finance minister Nirmala Sitharaman announced that a critical minerals mission will be set up “for domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets.”

“Its mandate will include technology development, skilled workforce, extended producer responsibility framework, and a suitable financing mechanism,” the minister added. Import duties that currently range from 2.5% to 10% on 28 critical minerals were scrapped, in an attempt to make cell manufacturing in India competitive. ACC PLI applicants could meet the domestic value addition goals under the scheme, in turn attracting specialized companies operating in the battery supply chain from global markets..

Fillip from budget

Three people aware of the developments said the new mission may be housed under the Ministry of Heavy Industries, and that it could raise financing for cell manufacturing. Consultations are likely with multiple industries, besides the Ministry of Electronics and Information Technology (Meity), they said.

Ashok Chandak, president of industry body India Electronics and Semiconductor Association (IESA), said that rationalizing import tariffs of such minerals “can impact about 5-10% of the battery cost itself.”

“The key goal here, instead of geopolitical independence, is to make India an attractive market in terms of the value of cell manufacturing locally. So far, only battery packaging is conducted in India, and cells are imported due to the lack of natural reserves of critical minerals, as well as high import duties that so far didn’t encourage many companies from catering to India’s battery needs. Through this mission, India will also be able to evaluate an as-yet unproven recycling industry, and see if the recycling technology of a handful of e-waste management firms can achieve the requisite levels of mineral purity to become suppliers to cell manufacturers,” said Parul Nagpal, partner at consultancy firm, EY India.

Chandak said the mission could resolve the problem of India failing to grab the proverbial ‘low-hanging fruits’ so far. “Take electronic registers, for example. These are one of the lowest-cost electronics components, and yet, we still continue to import them. With copper import duties abolished, we can now make these components here, which will add value to the entire supply chain,” he added.

Spokespersons for Reliance New Energy and Ola Electric did not respond to messages requesting for comment. An email sent to Waaree Energies, one of the latest applicants for the ACC PLI scheme, remained unanswered.

India’s battery ecosystem remains attractive because of its wide utility in consumer electronics, rapid growth of the electric vehicles industry, as well as limited competition.

A December 2023 report by market researcher Mordor Intelligence estimated the local battery industry at $7.2 billion in 2024, adding it could grow to $15.7 billion by 2029 at a compounded annual growth of 16.8%.

Meanwhile, e-waste recycling companies that claim to be able to supply high-purity minerals, such as Noida-headquartered duo Attero and Lohum, are yet to be proven at mass industrial scale, EY’s Nagpal and IESA’s Chandak said. As a result, their impact in establishing a critical minerals supply chain may not be immediate.

Resolving India’s plight

“E-waste recycling is a largely unorganized sector, and the entire process of collection of e-waste and subsequent recycling is not a well-established industry as yet. This does have the prospect, but is yet to be really proven,” Chandak added.

Companies, meanwhile, remain optimistic. Nitin Gupta, chief executive of Attero, said the move can promote value addition “beyond battery manufacturing supply chains, such as in pharmaceuticals.”

Chandak added that the mission’s impact could extend to industries such as space, telecommunications, semiconductors and steel —offering an all-around fillip to multiple billion-dollar sectors. With China controlling three-fourths of the global lithium processing, the mission may emerge as one of the most significant measures from Tuesday’s budget.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Prayer Times