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Centre taking proactive measures for critical mineral security

  • Published
    18th Nov, 2022
Context

In a bid to strengthen the critical mineral supply chain for emerging technologies, the government is taking several proactive measures.

About

What are Critical Minerals?

  • Critical minerals are elements that are the building blocks of essential modern-day technologies and are at risk of supply chain disruptions.
    • Risk: Any supply shock can severely imperil the economy and strategic autonomy of a country over-dependent on others to procure critical minerals.
  • These minerals are now used everywhere from making mobile phones, and computers to batteries, electric vehicles, and green technologies like solar panels and wind turbines.

Major Critical Minerals:

  • Graphite, Lithium, and Cobalt are used for making EV batteries.
  • Cobalt, Nickel, and Lithium are required for batteries used in electric vehicles,
  • Rare earth minerals are critical, in trace amounts, in semiconductors and high-end electronics manufacturing.

Extraction and Processing:

  • Many of these critical minerals are mined in Australia, China, the Democratic Republic of Congo, and South America, and much of the processing of these minerals takes place in China.

Why these Minerals are considered Critical?

  • Building blocks of essential modern-day technologies: They are used everywhere from making mobile phones, and computers to batteries, electric vehicles, and green technologies like solar panels and wind turbines.
  • For green ecosystem: As countries around the world scale up their transition towards clean energy and a digital economy, these critical resources are key to the ecosystem that fuels this change. 

Challenges

  • Threat to economic security: An over-reliance on “foreign sources and adversarial nations for critical minerals and materials posed national and economic security threats”
  • Risk of disruption: Due to individual needs and strategic considerations, they are at risk of supply chain disruptions.
  • Low availability and increasing demand

The looming threat

  • China is the world’s largest producer of 16 critical minerals.
  • China is responsible for some 70% and 60% of the global production of cobalt and rare earth elements, respectively (2019).
  • It also controls cobalt mines in the Democratic Republic of Congo, from where 70% of this mineral is sourced.

How government is actively engaged?

  • Commissioning of consultants: The government has commissioned consultants to identify assets and companies in the critical mineral sector in countries such as Australia.
  • Evaluation of Lithium varieties: The government is planning to send a team of geologists to Argentina to evaluate lithium varieties.
  • Identifying companies: The government of India and Australia are both working together to identify companies in the critical mineral space.

Steps were taken by India regarding Critical Minerals:

  • Lithium Agreement:
    • In mid-2020, India signed an agreement with an Argentinian firm to jointly prospect lithium in the South American country that has the third largest reserves of the metal in the world.
  • India-Australia Critical Minerals Investment Partnership:
    • India and Australia decided to strengthen their partnership in the field of projects and supply chains for critical minerals.
    • Australia has the resources to help India fulfill its ambitions to lower emissions and meet the growing demand for critical minerals to help India’s space and defense industries, and the manufacture of solar panels, batteries, and electric vehicles.
  • KhanijBidesh India Ltd. (KABIL): A joint venture of three Central Public Sector Enterprises, KhanijBidesh India Ltd. (KABIL), is taking charge of ensuring mineral security through facilitating supply chains, and mine asset acquisitions.
    • A notable achievement of KABIL was the signing of an MoU between the Indian and Australian governments for cooperation in the field of mining and processing of critical minerals.

Minerals Security Partnership (2022):

  • Minerals Security Partnership (MSP) is a US-led partnership initiative that aims to bolster critical mineral supply chains.
  • The new grouping is aimed at catalyzing investment from governments and the private sector to develop strategic opportunities.
  • India has shown interest in joining the USA-led Minerals Security Partnership (MSP) but has not found a place in the grouping because the country does not bring much expertise to the table.
  • It would be desirable to participate in such multi-country dialogues.
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