Rupal Kalebere

India joined the Mineral Security Partnership (MSP), led by the United States, in June of this year. This strategic partnership of 13 countries, including Australia, Canada, Germany, Japan, and the European Union, aims to catalyse global investments in crucial mineral supply chains. It reflects an acknowledgement of the growing importance of crucial minerals in the context of the worldwide transition to clean energy, as well as the potential hazards connected with their concentrated supply networks. The participation of India emphasises the need of resolving the difficulties posed by crucial mineral geopolitics.

The urgency to tackle climate change is driving a fundamental shift towards clean energy and green technologies around the world. The supply of essential minerals like cobalt, lithium, nickel, copper, and rare earth elements (REEs) is critical to this transformation. These minerals are required for the manufacture of batteries, wind turbines, solar panels, and mobility solutions across air, sea and land,  which are at the foundation of the new green revolution. Mineral demand for clean energy technology is expected to treble by 2050, with annual revenues exceeding USD 400 billion in both the Announced Pledges and Net Zero Scenarios. High and volatile essential material prices, as well as highly concentrated supply chains, could delay or increase the cost of energy transitions. To reduce this risk, action must be taken to increase and diversify sources, as well as recycling and other measures to slow demand growth. The fact that these resources are controlled by a few countries is critical. The top three producers of lithium, cobalt, and rare earth elements control well over three-quarters of global output. In other circumstances, a single country accounts for roughly half of global output. According to the International Energy Agency (IEA), the Democratic Republic of the Congo (DRC) and China accounted for roughly 70% and 60% of global cobalt and rare earth element output, respectively, in 2019. China also dominates other segments, especially processing.

According to IEA estimates, China’s refining share is roughly 35% for nickel, 50-70% for lithium and cobalt, and around 90% for rare earth elements. Chinese companies have made a slew of investments in Australia, Chile, the Democratic Republic of the Congo, and Indonesia. Because of the dominance of a few countries, the supply chain for such minerals has grown complicated. “The concentration level is even higher in processing and refining operations. China has established a strong footprint in all areas. China’s refining share is roughly 35% for nickel (the percentage rises when Chinese businesses are involved in Indonesian operations), 50-70% for lithium and cobalt, and as high as 90% for REE processing, which turns mined output into oxides, metals, and magnets.”, according to the IEA report.

The race for these critical minerals – key to achieving climate goals with sustainable products and processes – has prompted a wave of policy responses from governments and companies. This concentration of control in the hands of a single nation raises concerns about the resilience and security of global supply chains. It’s a risk that could significantly delay the energy transition or make it prohibitively expensive. To mitigate this risk, the MSP and other countries like the United States, the European Union, Australia, and Canada have implemented regulations and policies to ensure a sustained supply of critical minerals. Some have even resorted to curbing imports and exports to safeguard their access to these vital resources.

India has released its first comprehensive study on vital minerals, recognising the need of securing access to critical minerals for both economic and national security reasons. This research identifies 30 minerals as “critical” based on a three-stage assessment procedure. The presence of minerals such as cobalt, lithium, nickel, copper, and rare earth elements underlines India’s dedication to greener technology and its goal of becoming a net-zero emitter of greenhouse gases by 2070. Different governments have recognised a different number of essential minerals. The US has found 50, the EU has 34, and Australia has recognised 26. India’s list of 30 minerals demonstrates its intention to lobby for their recognition and to better comprehend global supply chains beyond the traditional ones. This step is about more than just ensuring access; it is also about reaffirming the resilience of the essential minerals supply chain, which is critical to India’s economic and security agenda. The competition for key minerals ‘weapons’ is, at its essence, a race to assure a sustainable future.

These minerals are essential to the modern technologies that will power the global transition to sustainable energy. We risk not only the success of this transformation, but also its cost and accessibility for all nations, if we do not have a robust and diverse supply chain. The issue at hand transcends geopolitics; it is one of global responsibility. Prime Minister Narendra Modi correctly stated that if countries with rich essential resources refuse to recognise their duty in ensuring equal access, the world may witness a new kind of colonialism. It’s a rallying cry for all nations to band together and solve this serious issue as a group. The difficulties we face are tremendous. High and volatile critical mineral prices, coupled with concentrated supply chains, threaten to impede progress towards a sustainable future.

However, there are steps we can take to minimize these risks and ensure a smoother energy transition. Firstly, we must focus on scaling up and diversifying supplies. This involves exploring new sources of critical minerals, investing in sustainable mining practices, and fostering international collaboration to reduce supply chain vulnerabilities. Secondly, recycling and circular economy practices must be promoted to moderate demand growth. Recycling not only conserves valuable resources but also reduces the environmental impact associated with mining and processing. Thirdly, nations must work together to ensure the equitable distribution of critical minerals. This means fostering international cooperation, reducing trade barriers, and incentivizing responsible mining practices in regions with abundant resources. Lastly, innovation in materials science and technology can help reduce the dependence on specific critical minerals.

The battle for key minerals is more than a race for resources; it is a race to ensure a sustainable future for everybody. The inclusion of India in the Mineral Security Partnership, as well as its thorough report on key minerals, indicate a rising understanding of the urgent need to address this issue. The international community must band together to guarantee that the energy transition is not derailed by supply chain interruptions or an excessive concentration of resources in the hands of a few states. We have an opportunity to redefine global cooperation and accountability as we negotiate the key critical minerals’ race. By working together, we can ensure that the benefits of critical minerals for multifarious climate friendly applications and processes are shared equitably, and the world moves closer to a sustainable and prosperous future for all.


Leave a Reply

Your email address will not be published. Required fields are marked *