Context

India and Australia Monday decided to strengthen their partnership in the field of projects and supply chains for critical minerals.

• Australia will commit $5.8 million to the three-year India-Australia Critical Minerals Investment Partnership.

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.
• These minerals are now used everywhere from making mobile phones, computers to batteries, electric vehicles and green technologies like solar panels and wind turbines.
• Based on their individual needs and strategic considerations, different countries create their own lists.
• However, such lists mostly include graphite, lithium and cobalt, which are used for making EV batteries; rare earths that are used for making magnets and silicon which is a key mineral for making computer chips and solar panels.
• Aerospace, communications and defence industries also rely on several such minerals as they are used in manufacturing fighter jets, drones, radio sets and other critical equipment.
  
  

Why is this resource critical?

• As countries around the world scale up their transition towards clean energy and digital economy, these critical resources are key to the ecosystem that fuels this change.
• Any supply shock can severely imperil the economy and strategic autonomy of a country over-dependent on others to procure critical minerals.
• They are critical as the world is fast shifting from a fossil fuel-intensive to a mineral-intensive energy system.

Steps taken by India:

• India has set up KABIL or the KhanijBidesh India Limited, a joint venture of three public sector companies, to “ensure a consistent supply of critical and strategic minerals to the Indian domestic market”.
• While KABIL would ensure mineral security of the nation, it would also help in realizing the overall objective of import substitution.
• Australia’s Critical Minerals Facilitation Office (CMFO) and KABIL had recently signed an MoU aimed at ensuring reliable supply of critical minerals to India.