India’s inclusion in the partnership will help its transition to clean energy & pave way for other countries to be part of the critical minerals club
Photo: iStock Last week, India became a part of the coveted critical minerals club — the Mineral Security Partnership (MSP) — headed by the United States. The announcement was part of a joint statement by US President Joe Biden and Indian Prime Minister Narendra Modi during the latter’s visit to US.
MSP is a strategic grouping of 13 member states including Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, the United Kingdom, US, the European Union, Italy and now India. It aims to catalyse public and private investment in critical mineral supply chains globally.
The proposal to onboard India comes after strong diplomatic engagements and push for joining the strategic partnership to secure and build a resilient supply chain for critical minerals.
India is already a member of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development, which supports the advancement of good mining governance.
India’s inclusion in the club is vital for India to fulfill its ambition of shifting towards sustainable mobility through large, reliable fleets of electric public and private transport. Securing the supply chain of critical minerals will also provide the country with the necessary push towards a concerted indigenous electronics and semiconductor manufacturing.
The inclusion will also pave the way for equitable sharing of resources across the globe. The MSP is elitist in its very idea of formation and induction of members. Countries like Indonesia, Vietnam, the Democratic Republic of Congo, which have abundant reserves of critical minerals are not part of this strategic grouping formed by US.
The diplomatic strength India possesses can create space for other countries to be part of the partnership and reduce their dependence on China by building a robust and reliable supply chain of raw materials needed for the clean energy transition, something that many economies across the world have been hoping for.
With heavy demand and the supply chain irregularities across the global mineral markets, various strategic groupings or international agreements have been started by major players to foster international partnerships, and to ensure a reliable and secure supply chain. Due to geopolitical uncertainties, unfavourable rising of prices, COVID-19 pandemic and the ongoing Russia-Ukraine war have resulted in the supply chain disruptions across the globe for these critical minerals.
Over the past decade, the G7 and G20 member countries, including US, UK, EU, Canada and Australia have declared their critical minerals lists and are also the part of several bilateral, plurilateral and multilateral agreements, specifically for the governance involving critical minerals and their strategic importance.
Cobalt, graphite, lithium, manganese, nickel and rare earth elements are these common strategic mineral resources that are demand-intensive due to their strategic uses in wind turbines, batteries of electric vehicles and other critical emerging technologies for green transition.
Recently, the US and the UK signed the Atlantic Declaration to begin negotiations on a critical minerals agreement, which would allow some UK firms to access tax credits available under the US Inflation Reduction Act.
With India pushing for an indigenous development of emerging technologies in the clean energy sector, scaling up the manufacturing of the technologies, including solar panels, wind turbines, batteries and electric vehicles will result in significant demand for and dependence on the supply of a range of minerals for the foreseeable future.
India and Australia have already signed the Critical Minerals Investment Partnership — a major milestone in working towards investment in critical minerals projects to develop supply chains between the two countries.
Investments under the partnership will seek to build new supply chains underpinned by critical minerals processed in Australia that will help India’s plans to lower emissions from its electricity network and become a global manufacturing hub, including for electric vehicles.
India’s entry into MSP will foster several bilateral, plurilateral and multilateral agreements, specifically for the governance involving critical minerals and their strategic importance among the member countries.
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