Since the birth of the nuclear age, the beach sands of peninsular India have attracted much attention. Every day, the sea washes up on the beaches of Kerala, Tamil Nadu, Andhra Pradesh, and Orissa, valuable deposits of beach sand minerals that had been carried to the sea from the Ghats by natural erosion through sun, wind, and rain.

Beach sand minerals comprise a group of minerals such as garnet, ilmenite, zircon, rutile, sillimanite, leucoxene and monazite.  Out of these, all minerals except monazite are non-radioactive and have common industrial applications.  Monazite, which contains Uranium and Thorium (roughly 10% max) apart from rare earths, is a highly valuable resource today and is the only radioactive mineral.  India has been producing and exporting monazite as early as 1910 for use in thorium-based gas mantles. Soon after Independence, the government brought all the mineral sands except garnet and sillimanite in the beach sands under national control though only monazite has any nuclear significance.

In 1998, private companies were invited to enter the beach sand mining sector covering six of the seven minerals – garnet, ilmenite, leucoxene, rutile, sillimanite, and zircon. Only monazite remained under the purview of the Department of Atomic Energy due to its uranium and thorium content.

This move was purely because India despite having 35 per cent of global beach sand deposits and the sector being restricted to public sector, was only contributing 0.2 per cent of the world’s production.  However, since the entry of private companies in 1998, India’s contribution to the world’s production increased to 6 per cent and export value skyrocketed from Rs. 35 crores in 1998 to Rs. 4,500 crores in 2015. It is significant to note that private companies contributed more than 90 per cent to this sector and also spearheaded value addition ahead of public sector enterprises.

Unlocking India’s monazite potential

The potential for capacity expansion and value addition in the six minerals notwithstanding, the miracle story lies in the seventh and as yet controlled atomic mineral, monazite.

Although Monazite contains 8 per cent Thorium and 0.3 per cent Uranium which are of strategic value, the real potential and economic value lies in 65 per cent rare earth elements it contains. India is home to 71 per cent of the world’s monazite reserve which lies totally unutilized and the world is solely depending on China’s monopoly in rare earth supply. There are 17 rare earth elements and as their collective name suggests, found only in very small quantities in the earth’s crust. These elements are used in almost all day-to-day gadgets and technology used by the common man, like smartphones, TVs, cars, audio systems, batteries, LEDs, speakers, cosmetics, computers and textiles.

Beach sand minerals with rare-earths in south India

For example, smartphones have proliferated like wildfire in the last few years and demand is only expected to increase in the coming years; these ubiquitous gadgets, however, rely on neodymium, europium, and cerium for their speakers and screens.

These elements also have magnetic, thermal, and electrical properties that find useful applications in several vital industries such as communications, electronics, transportation, energy, aerospace, and armaments. Some of the applications represent cutting-edge technologies that could determine the material evolution of society.

It is paradoxical that despite having huge reserves of rare earths (in the form of Monazite) in India, which lies unutilized due to Government regulations, we are unable to develop futuristic energy efficient technologies: for example, more efficient LEDs that have already been designed are yet to leave research laboratories for want of europium and terbium in commercial quantities. Similarly, the non-availability of neodymium and dysprosium have delayed the replacement of gearbox-driven wind turbines by more efficient direct-drive units. The widespread embrace of these technologies would go a long way in meeting not just India’s stated climate change goals but also its infrastructural development including clean and energy efficient technologies.

Make in India, another Tesla?

Rare earth elements also find use in some of the technologies that can truly be said to be of the future.  Rare earth elements like samarium, dysprosium, neodymium are playing a vital role in producing magnets, which in turn play a huge role in producing energy efficient motors.

Leading automobile companies like Toyota, Honda, Tesla are facing challenges in sourcing these critical minerals for their hybrid and electric cars, which are the future. These minerals are also part of magnets used in speakers /microphones found in almost all our smartphones, laptops, Ipads and AV systems.

Rare earth elements like Lanthanum and Cerium are the key raw materials for rechargeable batteries which are used in automobile and day-to-day electronics.

For example, Tesla has been experimenting with practical energy storage not only for its cars but also for renewable energy sources and electricity grids. Rare earths are key to some of the concepts and designs the company has developed. Easy access to rare earths may well entice the likes of Teslas to start manufacturing in India, bringing with them not just the technology and capital but also a demand for quality labour that dovetails well with the Make-in-India and Skill Development schemes that the Modi government has been trumpeting over the past couple of years.

Image By cytech via Wikimedia Commons

Indeed, the ambitious may well look beyond the arrival of hi-tech multinationals like Apple and Tesla to Indian shores to the time when India will be able to produce its own Apples and Teslas for the global market.

With the world’s attention turning to the environmental costs of 21st century growth, demand for commodities like rechargeable batteries, catalytic converters, fluid-cracking catalysts, hybrid vehicles, and stronger magnets is only expected to grow in the coming years. India can well emerge as a vital hub in the network of futuristic industries and technologies.

The China Angle

There is another reason for optimism in the development of India’s rare earths industry: the world market is dominated by China, with almost 95 per cent share of this market.

Beijing’s restrictive policies have raised concern in Tokyo, Washington, and the capitals of other major industrial powers. With everyone looking for other sources of these strategic elements, an Indian foray into the market would not just be welcomed but possibly nurtured by other industrial countries. Given the importance of the elements, India may even be able to import the latest technology for the safe and efficient extraction of rare earths to develop its own industry.

The technological manna, the economic bonanza, and the contribution to labour markets and skill development that would result from private sector participation in monazite processing is undeniable.

Yet with uranium and thorium as by-products, there is, however, an unfounded fear of private players handling nuclear materials.

Should we fear private handling of nuclear material?

First, private firms play an important role globally in the mining and processing of nuclear materials; corporations are even allowed to own and operate nuclear power plants and their record has so far been exemplary.

Second, it would be easy for the Department of Atomic Energy & Atomic Energy Regulatory Board to regularly audit or supervise the processing of monazite until the uranium and thorium are separated, which usually comes off in the first stage of monazite processing. The uranium and thorium values can be given to the Government by the private sector to fuel its nuclear reactors. With plans to boost nuclear energy to 63 GW by 2030, this would supplement the requirement of Uranium in the country.

India stands on the cusp of another mini-revolution – what information technology was to the 1990s, rare earths promise to be for the 2020s. Development of this sector can drastically alter the global market as well as domestic conditions in strategic, economic, as well as social terms. As a major exporter of such an important resource, India stands to gain some political leverage – as China does today – in its dealings with other powers.

Monazite on display. Image: By Ra’ike via Wikimedia Commons

Proper leveraging of this industry could also shift the balance of India’s economy from deficit (import driven) economy to surplus economy (export driven). Some of these elements even cost as high as Rs. 10 lakhs per kg. Not just that, because of the strategic applications of minerals in the defence sector, developed nations would rely on us, which could lead to a favoured strategic partnership.

For over a century, the occurrence of these minerals and India’s dominant resources are well known but nothing has been done so far. If we wait longer, the relevance and strategic advantages of these minerals may be lost with the entry of alternate and substitute materials.

All that remains is for Delhi to get over its irrational fear – protectionism? – of the private sector in handling radioactive materials.

The greatest obstacle to India’s development is India itself. In a recent article, I had written about the tremendous opportunities extant in the private development of the rare earths industry, specifically the processing of monazite. Unfortunately, that seems to be a stillborn dream, for the government has recently moved to restrict the beach sand minerals industry.

The historical record of the industry is pretty clear that government control over beach sand minerals will stifle growth, curtail exports, and effectively terminate any prospects of industrial, economic, or social development.

The Mines and Minerals (Development and Regulation) Act of 1957 had categorised all beach sand minerals (other than garnet and sillimanite) which were classified as Prescribed substances under Atomic energy act as atomic minerals. Realising the gross under-utilization of these resources by the public sector, in 1998, the government invited the private sector to participate in beach sand mining in an effort to give a fillip to the industry and the industry grew over a hundred-fold in 15 years; in 2007, except monazite and zircon all other beach sand minerals were removed from the list of prescribed substances in the Atomic Energy Act, along with the request to the Ministry of Mines to remove them from the list of Atomic minerals. Sadly, this never happened for the last 10 years, instead the present government seeks to put all minerals including Garnet and Sillimanite (which were never atomic minerals) as atomic minerals, which virtually closes the door for this industry.

Disastrous policy of Modi government

The AMCR (Atomic Minerals Concession Rules 2016) proposes to reserve all beach sand mineral deposits containing over 0.75 percent monazite in Total Heavy minerals for public sector companies; any already operating private mine that is found to contain above this concentration of monazite will again need to seek fresh clearances from AMD. Needless to say, these retrograde and draconian measures will severely damage the private sector role in beach sand mining.

If, on the other hand, the government were to allow the private sector to mine and process all minerals including monazite, and implement policies that would encourage the production, the industry estimates forecast almost a million jobs in direct and indirect employment, capital investments of over Rs 100,000 crores, and Rs 30,000 crores as revenue to the government.  It is pertinent to note that these revenue estimates are only from chemical processing of these minerals.  Actual revenue potential remains unimaginable and several times more for further downstream industries involved in producing magnets, speakers, motors, hybrid vehicles, electronics, defense and aviation systems.

Against an annual global demand of 125,000 tonnes, India produced just 300 tonnes of rare earth elements between 2009 and 2014 (6 years). A recent study done by the Council on Energy, Environment, and Water in conjunction with the Department of Science and Technology has also stated that the production of rare earth elements would significantly contribute to the growth of the manufacturing sector. In fact, the rationale for privatisation in 1998 as expressed in a Department of Atomic Energy report was the under-utilization of the beach sand mineral resources.

“However,” the report stated, “this is highly capital intensive and it may not be possible for only the PSUs (both Central and State-owned) operating in this field to set up the new plants on their own. It is therefore necessary to allow the private sector to set up such plants within the framework of some broad guidelines.”

Time is running out

The recently notified AMCR jeopardises the private sector participation in beach sand mineral industry and therefore puts the entire business at risk.  It is pertinent to note that, only after private participation in this industry post 1998, India became a prominent player in minerals such as ilmenite and garnet, competing against Australia and South Africa.

Given the geopolitical turmoil caused by Chinese assertion of hard power in recent years, major consumers of rare earth elements such as the United States and Japan are eagerly looking for other alternatives, which gives India a mega opportunity to produce these minerals.  If India misses this opportunity, the demand for Indian rare earths would diminish and economic and strategic advantage would be lost forever.

The present Government is welcoming FDI by opening up all sectors including defense, telecom, aviation, etc.  But contrary to this “Make in India” initiative, the Government’s recent actions (such as this AMCR) seek to restrict and destroy the beach sand minerals business opportunity. This mindset needs to be corrected immediately.

Private handling of atomic resources is not a risk

The oft-heard argument that atomic resources are a security risk in private hands needs to be once and for all debunked: plenty of private firms are engaged world-wide in nuclear activities from mining and processing to operating reactors.

Furthermore, security has been a convenient excuse for the government under which to hide incompetence – a look at the defence sector or the nuclear energy industry should be enough.

Finally, private companies would most likely be willing to bear the paranoia of the bureaucrats and agree to supervision of their monazite processing facilities by the Department of Atomic Energy. There is no reason to curtail private sector involvement in this lucrative field of the future.

The Modi government has been hailed for bringing in economic reforms, though admittedly in a trickle rather than a flood. Its beach sand mining policy, however, stands in stark contrast to the laurels it has won from economic commentators and harks back to the days of Jawaharlal Nehru – big, bureaucratic, and opaque public sector units, and a socialistic frame of mind.

If this government is serious about its “Make-in-India” program, its Skill Development scheme, and its overall development agenda, it cannot afford to throttle an up-and-coming industry that will be the lifeblood for dozens of global technological advancements in the coming decades.

Link : http://www.thenewsminute.com/article/unlocking-indias-monazite-modi-govts-beach-minerals-policy-resembles-nehruvian-socialism