Vikram Handa: ‘To boost critical mineral processing, need agreement with the US to make Indian products IRA-compliant’

Both synthetic and natural graphite have different properties and end applications. Natural graphite is made from flake graphite from the earth, with certain restrictions in properties and crystalline structure. Synthetic graphite is carbon converted into graphite at about 3,000 degrees, which usually gives you higher performance. High-end EVs use synthetic graphite, while energy storage often uses natural graphite, which is about 30 per cent cheaper. Customers blend natural and synthetic graphite to balance cost and performance, with ratios like 50/50 or 60/40, depending on their proprietary know-how. The market outside China is tilting towards synthetic graphite for high-performance EV battery materials.

There have been recent attempts to auction off graphite blocks for exploration purposes. What will it take to develop graphite mining in India?

India’s mines are primarily developed for thermal coal, iron ore, or bauxite. Graphite mines in India serve processors like us, not cell factories or EVs directly. African graphite often goes to China for processing before reaching cell factories. To develop critical mineral mines in India, we need to promote the processing industry. There’s a lack of focus on processing, where China leads. Europe and the US are addressing this, but India should do more. Current graphite mines in India are small, between half a million tonnes to one million tonnes, but battery production requires large, stable supply chains. We need 50-100 million tonnes mines to give supply visibility over 10-20 years. There’s a mismatch where the processing industry is not developing and at the same time no investments are going into big mines.

What kind of a policy intervention can be made to promote domestic processing of critical minerals like graphite?

We’re pushing for a critical minerals agreement, similar to the US-Japan agreement, which would make Indian products compliant with the Inflation Reduction Act (IRA). It will benefit India because the whole raw material ecosystem, technology, capital, and investments into mines will come in on its own. It also won’t cost the government anything– it’s not a subsidy scheme. You are essentially giving access to the US market, which is much more mature. If I talk to an American company and ask, “Would you rather invest in Canada, with which the US has an FTA, or India to make battery material?”, they would rather do it in India because of the ecosystem and the cost to build, which is very high in North America. I’m hoping that in the next few months, this opportunity gets more attention.

Coal tar from conventional steel production is used to produce synthetic graphite. With the market increasingly looking at green steel manufacturing, what is your outlook on the availability of coal tar?

Globally, coal tar is becoming a dying commodity due to steel decarbonization, with countries like China and Japan moving to electric arc furnace manufacturing. However, India’s steel production needs to grow from 130 million to 300 million tonnes in 7-10 years. The only way to take those big leaps is blast furnace technology. That’s where India offers this unique opportunity for coal tar availability. We’re also exploring other feedstocks as well, including qualifying petroleum sources in Europe and North America to localise supply chains as we expand globally. Over there, raw material won’t be coal tar-based, it will be petroleum-based.

How can the synthetic graphite supply chain for lithium-ion batteries be made more sustainable and circular?

There’s a perception that making battery materials or graphite is polluting, but with the right technology and sustainability focus, it’s possible to mitigate this. We use a lot of power in our process to produce graphite and it is 90 per cent renewable power in India, resulting in a carbon footprint that is 70 per cent lower than the same product made in China. In Finland, it’s even lower. The power source is crucial in determining environmental impact. Can this become a totally circular recycled industry? We believe it still has a long way to go. Unlike lithium or nickel, which are easier to recover and process back into sulphates to put into a cathode, graphite is a unique product as it degenerates in a battery over time. It is possible to bring it back to life and we are working on blending recycled graphite with virgin graphite, but these technologies are still maturing.

The EV transition in India has been bumpy off late. As a key player in the battery supply chain, where do you see the market going from here?

While we all talk about EVs in India and transition is happening sometimes slower, sometimes faster, I think we should really focus on the energy storage system (ESS) market because that transition is much more mature and happening at a much faster speed. Renewable capacity is growing really fast and a lot of that needs storage– that’s the low hanging fruit in India.

Can you take us through the commercials of setting up an anode manufacturing plant in India?

Our anode plant in Karnataka has a 30,000 tonne capacity that can cater to 30 gigawatts and will cost about Rs 4,000 crore. Now, I cannot build a 10,000 tonne plant, it’s not capex efficient. China today is building 100,000-tonne plants. The challenge in India is no customer will want to take 30,000 tonnes because today they are also small. So, the challenge is how to build in India when the market is immature. That’s why we will build in India and export to the US and Europe. As the Indian market matures, we will localise in those countries. We believe that India will be a very big market and we have to cater to it in the future, but for that we need scale.