India to leverage US-led Minerals Security Partnership

What’s in today’s article?

• Why in news?
• What is Minerals Security Partnership (MSP)?
• Benefits of India joining the partnership
• Critical minerals
• What are Critical Minerals?
• Recent Efforts by the Indian Govt to Boost its Critical Minerals Sector
• How does India currently get its supplies of critical minerals

Why in news?

• The Union Mines Ministry has suggested sharing critical mineral block proposals received from partner countries in the US-led Minerals Security Partnership (MSP) with central public sector undertakings or PSUs.
• This would enable them to acquire critical mineral assets abroad.
• Furthermore, the ministry has recommended that PSUs provide clear financial mandates to relevant subsidiaries to expedite the acquisition process.
  • PSUs such as Coal India Limited, NLC India Ltd, and NTPC Ltd have expressed interest in securing lithium, cobalt, and graphite assets overseas.

Minerals Security Partnership (MSP)

• About
  • Minerals Security Partnership is an ambitious new US-led partnership to secure supply chains of critical minerals, aimed at reducing dependency on China.
    • There is no global definition of critical minerals, but essentially, they are mineral deposits with high economic vulnerability and high global supply chain risk.
  • The partnership was announced at the world’s largest mining event, held in Toronto in August 2022.
• Members
  • MSP involves 14 countries including the UK, Australia, France, and Germany, and the European Union.
  • India joined the MSP in June 2023 during PM Modi’s visit to the US.
• Goal
  • The goal of the MSP is to ensure that critical minerals are produced, processed, and recycled in a manner that supports the ability of countries to realize the full economic development benefit of their geological endowments.
  • Demand for critical minerals, which are essential for clean energy and other technologies, is projected to expand significantly in the coming decades.
  • The MSP will help catalyse investment from governments and the private sector for strategic opportunities —across the full value chain.

Benefits of India joining the partnership

• Critical minerals are necessary for India’s growth
  • India’s growth strategy is powered by an ambitious shift in the mobility space through the conversion of a large part of public and private transport to electric vehicles.
  • This, alongside a concerted electronics manufacturing push, underlines the need to secure the supply of critical minerals.
• MSP has the potential to revamp supply chain of critical minerals
  • The new grouping could focus on the supply chains of minerals such as Cobalt, Nickel, Lithium and also the 17 rare earth (RE) minerals.
    • Cobalt, Nickel and Lithium are required for batteries used in electric vehicles.
    • Rare earth minerals are critical, in trace amounts, in the semiconductors and high-end electronics manufacturing.
• MSP as an alternative to China
  • Currently, China has created processing infrastructure in rare earth minerals and has acquired mines in Africa for elements such as cobalt.
  • Hence, the new alliance is seen as being primarily focused on evolving an alternative to China.

What are Critical Minerals?

• A mineral is critical when the risk of supply shortage and associated impact on the economy is (relatively) higher than other raw materials.
• These minerals are essential for economic development and national security, and their lack of availability/ the concentration of extraction/ processing in a few geographical locations could potentially lead to supply chain vulnerabilities.
• These (such as lithium, graphite, cobalt, titanium, and rare earth elements) are essential for the advancement of many sectors, including high-tech electronics, telecommunications, transport, and defence.
• It forms part of multiple strategic value chains, including -
  • Clean technologies initiatives such as zero-emission vehicles, wind turbines, solar panels;
  • Information and communication technologies, including semiconductors; and
  • Advanced manufacturing inputs and materials such as defence applications, permanent magnets, ceramics.

Recent Efforts by the Indian Govt to Boost its Critical Minerals Sector

• Identification of 30 Critical Minerals by the Indian Govt
  • In July 2023, released a list of 30 critical minerals for India.
  • These minerals are Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, PGE, Phosphorous, Potash, REE, Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium and Cadmium.
• Allowed mining
  • The govt amended a key law to allow for the mining of three critical minerals, lithium, niobium, and REEs, earlier this year.
  • To attract bidders, the government also specified new royalty rates for critical minerals, matching global benchmarks.
• Increased exploration work by Geological Survey of India
  • The Geological Survey of India has taken up 125 projects in the current fiscal to explore critical mineral reserves in the country.
    • It had carried out mineral exploration in Salal-Haimna areas (Reasi district, J&K), and estimated 5.9 million tonnes of lithium ore.
  • In the preceding eight fiscal years, a total of 625 mineral exploration projects were undertaken.
• Centre of Excellence for Critical Minerals
  • Report of the Committee on Identification of Critical Minerals, released in June 2023, recommended that a Centre of Excellence for Critical Minerals should be established.
    • This is to frame policies and incentives for creating a complete value chain of critical minerals in the country.
• Khanij Bidesh India Ltd. (KABIL)
  • A joint venture company namely Khanij Bidesh India Ltd. (KABIL) is mandated to identify and acquire overseas mineral assets of critical and strategic nature (lithium, cobalt) to ensure supply side assurance.
• The Mineral Security Partnership (MSP)
  • In August 2023, India was inducted into MSP.
• Auction for commercial mining by the private sector
  • In November 2023, the Ministry of Mines has floated the Notice Inviting Tender (NIT) for 20 blocks spread over eight states.
  • The mineral blocks contain lithium ore and another 10 of the 30 minerals that the government declared as “critical” in July 2023.
    • This was the first time that rights related to the mining of lithium ore are being auctioned to private parties.

How does India currently get its supplies of critical minerals?

• In FY23, India imported 2,145 tonnes of lithium carbonate and lithium oxide.
  • Lithium carbonate contains up to 19 per cent lithium.
  • Lithium oxide, which is usually converted to lithium hydroxide, contains 29 per cent lithium.
• India also imported 32,000 tonnes of unwrought nickel, and 1.2 million tonnes of copper ore in 2022-23.
• India is 100 per cent reliant on imports for its lithium and nickel demand. For copper, this figure is 93 per cent.

Q1) What is Khanij Bidesh India Ltd. (KABIL)?

Khanij Bidesh India Limited (KABIL) is a joint venture company between the National Aluminium Company Ltd. (NALCO), HCL, and MECL. It was formed in August 2019 under the Ministry of Mines, Government of India. 

Q2) What are Rare earth elements (REE)?

Rare earth elements (REE) are a group of 17 elements that include yttrium and 15 lanthanide elements. They are commonly divided into light REE (LREE) and heavy REE (HREE).

Source: India to leverage US-led Minerals Security Partnership to help PSUs secure critical mineral assets abroad | US Department of State | PIB | Indian Express