By Observer Research Foundation
In the year 2010, barely two years after Apple produced the first smartphone, China doubled the price of 17 rare earth metals. These difficult to mine materials are considered critical to modern day electronics. Be it mobile phones, solar batteries, semiconductors, electromagnets, aerospace or defence industry, these rare earth are the backbone of the technology hardware world.
Incidentally, 95 percent of the world’s rare earth is controlled by China. It did not happen by chance, but by design. The post-Mao Chinese economic revival was shaped by party strongman Deng Xiao Ping after 1978. It ensured an annual GDP growth of 9.5 percent for more than two decades, peaking to over 15 percent in 1984.
How China established the lead in green technology
In March 1986, four engineers under physicist and engineer Wang Ganchang conceived ‘The State High Tech Development Plan’ certified by Deng Xiao Ping that unleashed the blueprint of China’s technology leadership. Among the seven key areas defined under the 863 programme was new materials or rare earth materials. Ever since China has been investing in mining and learning the process of putting rare earth materials to industrial use.
China acquired much of the rare earth mines across the world before the turn of the century at throwaway prices. Thereafter, it set up the complex intermediate processing centres for benefaction and separation. Here, after extensive trial and error involving thousands of chemical separation processes, they perfected what is needed to separate rare earth metals and prepare them for industrial use. Then they built environmentally friendly industrial capacities for each of these complex processes.
It took them more than a decade and sustained investment to produce Neodymium, Lanthanum, Didymium, Cerium, Erbium, and over a dozen other rare earth materials. This was years before the first iPad and iPhone was built by Apple. The magnets of iPhones and the iPad have neodymium while there is in all probability lanthanum in the iPad’s lithium-ion polymer battery. Most solar power and high tech cameras have lithium or lanthanum batteries. China’s monopoly of rare earth gives it leadership and spectacular profits in new age green technologies. Lanthanum oxide today costs 15,000 RMB/ MT while Neodymium oxide costs 350,000 RMB/MT.
Riding on mining leadership, China threw open its MSME sector to electric two-wheelers a decade back. Once again, while the world was sleeping, China was producing electric two-wheelers which were the standard, non-subsidised, transport for millions of its factory workers. It took China 10 years to build scalable capacities at affordable costs. Soon, 2000 Chinese manufacturers were producing 30 million electric two-wheelers annually by 2010. The Indian two wheeler and four wheeler industry refused to take heed and kept investing in fossil fuel engines. Reva, an MSME player, was the only Indian electric vehicle maker till 2010 making less than a hundred vehicles a year.
Is it not strange that Goldstone, who had no experience of an automobile manufacturer, has tied up with the world’s largest bus maker? The company is setting up a new plant outside Hyderabad with a capacity of 1500 buses per year. The buses from its new plant will be able to travel 300 km with AC on after a single charge, claims its Managing Director NK Rawal.
China has dozens of electric bus makers and battery makers willing to enter India. The problem is with the Indian automobile industry. They are still waiting on their haunches for the Chinese to come to them at their terms instead of taking the initiative to find the right partner. Negotiating with the Chinese is a difficult ball game, but considering their monopoly hold on electric vehicle and battery technology, can India afford to miss the bus?
Pollution is both a challenge and opportunity
India’s capital, Delhi, has been facing severe air pollution problems since the last two decades. CNG buses and autos became a reality after a Supreme Court driven intervention in 1998 specified the date of April 2001 for the compulsory CNG conversion of commercial vehicles. All buses, autos, and cars in the city were to convert to the clean fuel, namely CNG, by that date. But pollution did not go away from Delhi even after CNG conversion. Instead, after 20 years, it has become even more severe than ever before.
Air pollution has been an old and unsolvable problem for two decades in India. As per CPCB not only the metro cities but even smaller towns across India are severely affected by air pollution. But the industry to measure air pollution has not developed locally.
In the last 20 years, the global market for air pollution equipment has increased to $15 billion. As per the Global Air Pollution Control Equipment and Technologies Report 2017, the market will be growing at a CAGR of 7.8 percent for the period 2016-21. But it is only a year back that Indian cities started measuring air pollution on a regular basis. We often tend to blame the Government, but the truth is that India Inc failed to put up measurement and mitigation equipment in the marketplace, despite inherent demand.
Why was India Inc not responsive? The problem has been there for two decades. Why do we not have manufacturers producing air pollution measurement and mitigation equipment in thousands? Why do manufacturing States like Gujarat and Tamilnadu have just one CPCB pollution monitoring station? Why is there no equipment to measure Nox or other harmful gases that are slowly poisoning us?
The problem is not only with air pollution alone. Water pollution and treatment is also a major problem across India. The water bodies are polluted and there is an urgent need for measurement, purifying and recycling waste water. But there are only a handful of Indian manufacturers. Technology is not updated and even pricing of equipment produced by them is high. China, by contrast, has several thousand makers of air pollution and hundreds of water treatment equipment manufacturers.
So it is time that India Inc take the initiative to avail this trillion-dollar opportunity of pollution monitoring and control that is so critical for its 1.3 billion inhabitants.