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There is growing concern in the government that India is not fitting in to the Minerals Security Partnership, an ambitious new US-led partnership to secure supply chains of critical minerals, aimed at reducing dependence on China.
The Union Finance Ministry has reportedly reached out to the External Affairs Ministry to explore the possibility of New Delhi joining the 11-member group, a senior official told The Indian Express.
This is gaining importance as one of the key elements of India’s growth strategy is fueled by an ambitious shift in the mobility space through the conversion of a large portion of public and private transport to electric vehicles. This, alongside a concerted push in electronics manufacturing, highlights the need to secure the supply of critical minerals.
In addition to the United States, the MSP includes Australia, Canada, Finland, France, Germany, Japan, Republic of Korea, Sweden, United Kingdom and the European Commission.
The new grouping, according to industry insiders, could focus on supply chains of minerals such as cobalt, nickel, lithium and also the 17 “rare earth” minerals.
While cobalt, nickel and lithium are needed for batteries used in electric vehicles, rare earth minerals are essential, at trace levels, in the manufacture of semiconductors and high-end electronics. .
This new alliance is seen as being primarily focused on evolving an alternative to China, which has created infrastructure for processing rare earth minerals and acquired mines in Africa for elements such as cobalt.
India’s exclusion from the MSP comes amid renewed cooperation with Washington DC on several other fronts, including the informal ‘Quad’ grouping that brings together the United States, Japan, Australia and the United States. ‘India. As part of this combination, a Quad Vaccine partnership was announced last year.
Following the Quad, India was included as a member of a new economic grouping alongside Israel, the United Arab Emirates and the United States – the I2U2 – which focuses on six key areas of cooperation: health, water, transport, food security, space and energy.
The new MSP cluster aims to catalyze investment from governments and the private sector for strategic opportunities.
“The demand for critical minerals, which are essential for clean energy and other technologies, is expected to increase significantly over the coming decades. MSP will help catalyze government and private sector investments for strategic opportunities—across the entire value chain—that adhere to the highest environmental, social, and governance standards,” the State Department said. American in a June 14 press release.
India is seen as a late mover in attempts to enter the lithium value chain, at a time when electric vehicles are expected to be an industry ripe for disruption.
The year 2022 is likely to be an inflection point for battery technology – with several potential enhancements to Li-ion technology and alternatives to this proven formulation in advanced stages of commercialization.
In mid-2020, India, through a newly-listed state-owned company, had signed an agreement with an Argentinian company to jointly prospect for lithium in the South American country which has the third most large reserves of metal in the world. The company, Khanij Bidesh India Ltd, was incorporated in August 2019 by three public companies, NALCO, Hindustan Copper and Mineral Exploration Ltd, with a specific mandate to acquire strategic mining assets such as lithium and cobalt overseas. . The company is also exploring options in Chile and Bolivia, as well as Australia.
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Rare earths consist of seventeen elements and are categorized into light ER elements (LREE) and heavy ER elements (HREE). Some RE are available in India such as lanthanum, cerium, neodymium, praseodymium and samarium while others such as dysprosium, terbium, europium which are classified as HREE are not available in India. Indian deposits in extractable quantity.
Therefore, there is a dependency on countries such as China for HREE, which is one of the major producers of RE with about 70% of global production.
Industry watchers say one of the reasons India hasn’t made it into the grouping is that the country doesn’t bring a lot of expertise to the table. In the group, countries like Australia and Canada have the reserves and also the technology to extract them and countries like Japan have the technology to process them.