Concern in Delhi over not being part of US-led critical minerals alliance

THERE IS growing government concern that India has no place in 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 Ministry of Finance has been informed that it has communicated with the State Department to explore the possibility of New Delhi joining the 11-member group, a senior official told The Indian Express.

This assumes significance, as one of the key elements of India’s growth strategy is driven by an ambitious shift in the mobility space through the conversion of much of public and private transport to electric vehicles. This, in addition to a concerted push on electronics manufacturing, underscores the need to secure supplies of critical minerals.

In addition to the US, the MSP includes Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, the United Kingdom, and the European Commission.

Industry insiders say the new group could focus on supply chains for 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 critical, in trace amounts, in semiconductors and high-end electronics manufacturing.

This new alliance is seen as primarily focused on developing an alternative to China, which has created a processing infrastructure for rare earth minerals and acquired mines in Africa for elements such as cobalt.

India’s exclusion from the MSP comes as there is renewed cooperation with Washington DC on multiple other fronts, including the ‘Quad’ informal group uniting the US, Japan, Australia and India. As part of this grouping, a Quad Vaccine Partnership was announced last year.

After the Quad, India was included as a member of a new economic grouping alongside Israel, the UAE and the US – the I2U2 – that focuses on six key areas of cooperation: health, water, transport, food security, space and energy.

The new MSP grouping aims to catalyze government and private sector investment for strategic opportunities.

“Demand for critical minerals, which are essential for clean energy and other technologies, is expected to increase significantly in the coming decades. The MSP will help catalyze government and private sector investment for strategic opportunities — across the entire value chain — that meet the highest environmental, social and governance standards,” the US State Department said in a June 14 statement. .

India is seen as a late mover in efforts to enter the lithium value chain, at a time when EVs are expected to be an industry ripe for disruption.

The year 2022 will likely be a turning point for battery technology – with several potential improvements to Li-ion technology and alternatives to this proven formulation in advanced stages of commercialization.

By mid-2020, India, through a newly created state-owned company, had signed an agreement with an Argentine company to jointly prospect lithium in the South American country that has the world’s third largest metal reserves. The company, Khanij Bidesh India Ltd, was established in August 2019 by three state-owned companies, NALCO, Hindustan Copper and Mineral Exploration Ltd, with the specific mandate to acquire strategic mineral assets such as lithium and cobalt overseas. The company is also exploring options in Chile and Bolivia and in Australia.

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Rare Earth consists of seventeen elements and is classified as light RE elements (LREE) and heavy RE elements (HREE). Some RE are available in India like Lanthanum, Cerium, Neodymium, Praseodymium and Samarium while others like Dysprosium, Terbium, Europium which are classified as HREE are not available in Indian deposits in extractable amounts.

Therefore, there is a reliance on countries like China for HREE, which is one of the leading producers of RE with an estimated 70 percent of global production.

Industry watchers say one of the reasons India wouldn’t have found a place in the group is because the country doesn’t bring much expertise to the table. In the group, countries like Australia and Canada have reserves and also technology to extract them and countries like Japan have the technology to process them.

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