A MIDST all the hoopla about the slew of agreements and collaborations that India and America have entered into, one that has not been in the spotlight is the Minerals Security Partnership (MSP), a US-led partnership to create critical energy minerals supply chains.
The Minerals Security Partnership will aim to help “catalyse investment from governments and the private sector for strategic opportunities … that adhere to the highest environmental, social, and governance standards,” the State Department said in a statement when MSP was launched in June 2022. According to the International Energy Agency, the major producers of critical minerals are China, Congo, Chile, Indonesia, South Africa, and Australia. China has global dominance in terms of processing.
Critical minerals
As the Business Standard explained in a piece on the MSP, “the focus is primarily on the supply chains of critical minerals such as cobalt, nickel, lithium and the 17 ‘rare earth’ minerals. An official said, “… As newer manufacturing verticals are established in India, sourcing many critical minerals in large volumes will become necessary. We expect dependence on any one country to become a key challenge then”.”
Increasingly over the past few years, both the G7 and G20 have spent considerable time on the critical minerals and their supply chains and how to make them more equitable in availability. Not just that, they have all declared their critical mineral lists, including many aspects of their bilateral and multilateral agreements, to help facilitate a better template for the regulatory mechanism involving critical minerals.
At the sovereign level, countries have their list of critical minerals that are purely dependent on the sectors and their strategic importance. In the Indian context, this list is crafted keeping in mind the criticality of those minerals and an in-depth assessment of their supply chain fault lines. The key critical minerals for India include graphite, lithium and cobalt used in manufacturing fighter jets, drones, and communication devices. They are also vital for semiconductor and high-end electronics manufacturing platforms.
Apart from the critical minerals, there are also rare earth minerals and metals including lithium, gallium, tellurium, and indium which are at the core of high technology. In classification terms, rare earth (RE) includes light RE elements (LREE) and heavy RE elements (HREE) which are 17 in number.
In an attempt to stabilise its supply chain, India has formalised its relationship with Australia under the Australia-India Critical Minerals Investment Partnership. Under this, India can take resources from Australia to meet the growing demand for critical minerals to help its space and defence industries and the manufacture of electric vehicles.
Further consolidation
Now by joining the Minerals Security Partnership (MSP), India has attempted to further consolidate its requirements. As a bonus, Union Minister of Mines Pralhad Joshi unveiled on June 28 the first-ever report of India on ‘Critical Minerals for India’. The report has identified the comprehensive list of critical minerals, taking into account the requirements of sectors like defence, energy, pharmaceutical, telecom etc.
Mines Secretary Vivek Bharadwaj said: “We are leaving no stone unturned to ensure that we are self-reliant in critical minerals, whether that is through expansion of domestic exploration or tieups with countries rich in critical minerals.”
What Joshi and Bharadwaj were saying is only an extension of what was spelt out in the Economic Survey tabled in Parliament this year. The policy enunciated that the country needs a vibrant and multi-dimensional template that could help address every issue arising as a consequence of the sparse and uneven distribution of these minerals.
Skewed distribution
As the Survey emphasised: “While the demand for critical minerals is set to increase because of the global preference and emphasis towards renewable energy, the global supply chain of the critical minerals is highly concentrated and unevenly distributed. The skewed distribution of the resource poses a supply risk in the face of its enhanced demand. A carefully crafted multidimensional mineral policy would reduce our dependence and address the problems for the future.” Plus, the Survey added, there is a need to have strategic mineral reserves to make sure that the country has a regular and steady supply of these critical elements.
India joining the MSP is one such move – to secure supplies and join the global network working towards this objective. The serious and strategic discourse to secure critical supply chains on the mineral highway is just in time. Many of our ambitions in technology will be hugely dependent on this effort.
