Securing the New Oil The Hidden Battle for Global Power and Wealth

Topic: GS2 – International Relations GS3 – Indian Economy

Context

Ukraine’s potential offer of critical mineral access to the U.S. may shape the resolution of the Russia-Ukraine war amid global competition for resource security.

 

Analysis of the news:

The Imminent Resolution of the Russia-Ukraine War and Its Economic Implications

• A resolution to the ongoing Russia-Ukraine war seems closer than ever, with the contours of peace hinging on a strategic economic deal—Ukraine’s offer to grant American access to its vast critical mineral resources.
• In the past, American foreign interventions were often dictated by the geopolitics of oil.
• However, as the global economy transitions towards clean energy and advanced technologies, critical minerals like lithium, cobalt, graphite, and rare earth elements have become the new oil.
• These minerals are indispensable for the future of electric vehicles, renewable energy, and semiconductor industries.
• Given their growing influence on both economic and military strategies, India must carefully assess the evolving global dynamics and its own vulnerabilities in critical mineral dependencies.

Historical Parallels: Oil and America’s Foreign Conflicts

• In the latter half of the 20th century, America’s foreign interventions, including the First Gulf War, were largely influenced by a combination of ideological battles and oil security concerns.
• At that time, the U.S. was heavily dependent on oil imports, making energy security a strategic necessity.
• Over the years, the U.S. systematically reduced this vulnerability, transforming itself into the world’s largest oil and gas producer.
  This self-sufficiency has been a crucial factor in securing its global dominance.
• A similar pattern is visible in Russia’s ability to sustain long-term conflicts. Despite an otherwise moderate economy, Russia’s self-sufficiency in oil, gas, and defense equipment enables it to maintain prolonged military engagements.
• Additionally, Europe’s reliance on Russian energy complicates its response to the conflict, showcasing how energy dependence can shape geopolitical strategies.

The U.S. and the New Energy Battle: Critical Minerals

What are Critical Minerals?

Critical minerals are those minerals which are essential for economic development and national security of a country. The lack of availability of these minerals or even concentration of existence, extraction or processing of these minerals in few geographical locations may lead to supply chain vulnerability and disruption.

• Today, America’s strategic vulnerability has shifted from oil to critical minerals.
• Unlike oil, where the U.S. has achieved energy independence, critical minerals remain a major point of concern.
• The country is highly dependent on imports, and a significant portion of these minerals—especially rare earth elements—are controlled by China.
• This situation is comparable to a hypothetical Cold War scenario where the Soviet Union had monopolized global oil supplies.
• Recognizing the strategic importance of critical minerals, past U.S. administrations have explored various measures to secure alternative supplies.
• President Donald Trump’s interest in acquiring Greenland or integrating Canada more closely into the U.S. was largely driven by their mineral wealth.
• Ukraine, too, holds significant reserves—one-third of Europe’s estimated lithium deposits, top-tier graphite reserves, and crucial rare earth elements.
• Given China’s near-monopoly on rare earths (controlling about 75% of global supply), Ukraine’s resource wealth makes it a valuable asset in America’s ongoing economic and technological competition with China.

Geopolitical Competition: The Race for Technological Dominance

• The U.S. and China are engaged in a high-stakes race for technological superiority.
• While the U.S. holds an edge in many sectors, China has made substantial progress, particularly in electric vehicles (where Tesla is the only major U.S. competitor), AI research (evidenced by its advances in DeepSeek), and military hardware production, including sixth-generation fighter jets.
• If America remains dependent on Chinese-controlled mineral supply chains, its position in these industries could be undermined.
• To mitigate this risk, the U.S. is actively seeking to diversify its supply sources.
• While achieving complete self-sufficiency in critical minerals is unlikely, Washington is determined to eliminate reliance on China or any country that does not align with American interests.
• This urgency increases Ukraine’s strategic value, especially since the ongoing war gives the U.S. a unique leverage over Kyiv—one that it does not have over mineral-rich Greenland or Canada.

Lessons for India: Reducing Import Dependence

• India is not yet a major player in the technological race between the U.S. and China, but it has ambitious plans to become a global manufacturing hub.
• As part of its push for self-reliance, India aims to scale up domestic production of electric vehicles, solar panels, and semiconductor components—all of which require large quantities of critical minerals.
• However, India’s dependency on imports for these resources is even greater than its past reliance on oil.
• While the government has been securing supply agreements with friendly nations and investing in overseas mining assets, domestic production remains limited due to insufficient exploration.
• The key to reducing vulnerability lies in liberalizing mineral exploration and encouraging private investment in domestic mining projects.
• Many countries allow companies that discover mineral deposits to monetize their findings—a model India should adopt to boost its self-sufficiency in critical minerals.

Conclusion:

• The global economy is undergoing a major transformation, where critical minerals are replacing oil as the key driver of geopolitical strategies.
• The U.S. is adapting its approach to secure alternative sources, recognizing that dependence on China for these resources could threaten its technological and military dominance.
• Ukraine’s mineral wealth positions it as a crucial player in this evolving landscape.
• For India, the lessons are clear: securing a stable and independent supply of critical minerals is essential for long-term economic and technological growth.
• The country must move beyond short-term import strategies and focus on unlocking its domestic mineral potential to safeguard its industrial future.

PYQ: Consider the following minerals: (2020) 1.     Bentonite 2.     Chromite 3.     Kyanite 4.     Sillimanite In India, which of the above is/are officially designated as major minerals? (A) 1 and 2 only (B) 4 only (C) 1 and 3 only (D) 2, 3 and 4 only Ans: D

Practice Question: In the evolving global geopolitical landscape, critical minerals are emerging as the new oil, influencing economic policies, diplomatic relations, and conflicts. Discuss the implications of critical mineral dependence for global powers and analyze the steps India should take to ensure its resource security. (250 Words /15 marks)

2.The power of new nuclear

Topic: GS3 – Science & Technology

Context

The Indian government has recognized the crucial role of nuclear energy in achieving “Viksit Bharat” and set a target of 100 GWe nuclear capacity by 2047, prompting discussions on fuel supply and reactor technology.

 Analysis of the news:

The Role of Nuclear Energy in Viksit Bharat

• The Indian government has finally acknowledged the crucial role of nuclear energy in achieving the vision of Viksit Bharat (Developed India).
• The ambitious target of 100 GWe nuclear capacity by 2047 may seem daunting, especially given the current lack of clarity on its execution.
• However, this target is the bare minimum required to sustain long-term energy security and economic growth.

The Challenge of Uranium Supply

• Running a 100 GWe nuclear capacity would demand approximately 18,000 tons of uranium annually, which is nearly a third of today’s global uranium production.
• This level of uranium procurement is not feasible, making it imperative for India to adopt fuel recycling strategies.
• The reliance on mined uranium alone will become unsustainable as nuclear capacity expands.
• By the time India reaches 25 GWe, uranium requirements will already constitute 8–10% of global production, making access to fuel increasingly difficult.
• This milestone is expected within the next decade, necessitating a shift towards recycled nuclear fuel to sustain further capacity growth.

Closing the Nuclear Fuel Cycle and Fast Breeder Reactors

• India has made significant strides in nuclear fuel recycling. The Prototype Fast Breeder Reactor (PFBR) with 500 MWe capacity has demonstrated the ability to recycle spent nuclear fuel.
• However, large-scale deployment of fast breeder reactors (FBRs), which can use recycled fuel and generate more fuel, remains elusive.
• Given the looming constraints on uranium supply, India needs an immediate solution to avoid a slowdown in nuclear expansion.

In the past, a similar challenge was addressed through international civil nuclear cooperation, allowing India access to global uranium markets. However, a long-term domestic solution is required to ensure energy security without external dependencies.

Thorium: The Key to Energy Independence

• A promising alternative to mined uranium is thorium, which has long been considered India’s pathway to true energy security.
• By irradiating thorium with High-Assay Low Enriched Uranium (HALEU) in Pressurised Heavy Water Reactors (PHWRs), India can generate substantial amounts of nuclear fuel.
• This approach allows for recycling used fuel to establish Molten Salt Reactors (MSRs), which are crucial for the third stage of India’s nuclear energy program.

Rather than pursuing foreign reactor designs that may not align with India’s strategic needs, the country must set clear technological goals and leverage domestic capabilities. While fast reactors using recycled uranium and plutonium remain the superior option, HALEU-thorium fuel is a pragmatic alternative that allows nuclear expansion without excessive uranium dependency.

Advantages of Thorium-Based Fuel

Beyond its energy potential, thorium offers economic and security advantages, especially in PHWRs:

1. Improved reactor operation and safety – Thorium-based fuel enhances reactor performance and reduces risks.
2. Lower uranium consumption – Reducing the need for mined uranium, making India less dependent on external suppliers.
3. Reduced fuel bundle requirements – Less spent fuel to manage, leading to cost savings and lower nuclear waste.
4. Proliferation resistance – Thorium-based fuel cycles are less susceptible to nuclear weapons proliferation, reducing security risks.
5. Seamless integration into existing reactors – HALEU-thorium fuel can be used in existing PHWRs without major design modifications.
6. Feedstock for molten salt reactors – Spent thorium fuel can be further used in MSRs, advancing India’s long-term nuclear strategy.

Bharat Small Reactors (BSRs) and the Role of SMRs

• The government’s Bharat Small Reactors (BSR) initiative is a welcome step, especially under a public-private partnership model.
• Alongside 700 MWe PHWRs, which should be the primary workhorse, BSRs can play a supportive role in nuclear capacity expansion.
• Globally, Small Modular Reactors (SMRs) are gaining popularity, but India already has extensive experience with 220 MWe PHWRs, which have proven commercial viability.
• Unlike global SMR designs, which lack widespread deployment, India’s small reactors have been successfully operating for decades.

For SMRs to be viable in India, they must:

1. Be safe enough to eliminate evacuation concerns in case of an accident.
2. Require no exclusion zones, making them suitable for retiring coal plant sites.
3. Be fully manufactured in India, ensuring economic competitiveness.

The AHWR-300-LEU, a fully developed Indian thorium-based reactor design, met these criteria but was never pursued. Reviving such indigenous designs would strengthen India’s energy independence.

The Role of Research Institutions and Private Sector Participation

• Achieving India’s nuclear goals requires strong leadership from institutions like Bhabha Atomic Research Centre (BARC) and Indira Gandhi Centre for Atomic Research (IGCAR).
• While private sector participation can help scale up production, the core technology development must remain with public research institutions.
• A reverse approach, where private firms lead the technological push, could result in irreversible damage to India’s nuclear program.

Conclusion:

For India to meet its 100 GWe target by 2047, a strategic shift is essential:

• Expanding fuel recycling and thorium utilization to overcome uranium supply constraints.
• Prioritizing PHWRs and Bharat Small Reactors while ensuring large-scale deployment of fast breeder reactors.
• Leveraging existing strengths in small reactors rather than blindly following the global SMR trend.
• Empowering Indian research institutions to drive nuclear advancements, while mobilizing private sector only for scaling up.

By making pragmatic and technologically sound choices, India can secure its nuclear future and achieve the vision of Viksit Bharat with clean, reliable, and sustainable energy.

Practice Question: India aims to achieve 100 GWe of nuclear capacity by 2047 as part of its vision for Viksit Bharat. Discuss the challenges associated with fuel supply and reactor technology in this pursuit. Suggest measures to ensure long-term nuclear energy sustainability in India. (250 Words /15 marks)

 If like this Editorial don’t forget to check previous – Looking again at EU