News Brief
India's Possible Entry Into US-Led Global Alliance On Critical Minerals To Be Discussed During PM Modi's US Visit
Lithium ore, which forms raw material for lithium-ion batteries also used for electric vehicles, crucial to India's energy transition in the coming future.
According to reports, Prime Minister Narendra Modi's upcoming state visit to the US will involve discussions on India's potential membership in a US-led global alliance for critical minerals.
Last year in June, the US, the European Union, and other G7 partners established the Minerals Security Partnership to prevent China from further strengthening its hold on critical mineral supplies worldwide.
Officials have stated that India's Ministry of Finance and other ministries have urged the Ministry of External Affairs to consider the possibility of India joining the partnership.
The demand for minerals crucial to clean energy, semiconductors, and telecom technologies is expected to increase significantly in the coming decades.
An official stated that they will discuss the issue during the Prime Minister's visit and explore preparatory talks on the subject. They anticipate the need to source critical minerals in large volumes as newer manufacturing verticals are established in India. Further, dependence on any one country to become a key challenge in the future.
India aims to join the alliance to gain access to investment from governments and private sectors of developed nations. This will provide strategic opportunities across the entire value chain.
Participating countries will pursue investment in mining, processing, and recycling development that maintains high environmental and social-governance standards, according to the US's statements in the past.
The Economic Survey 2022-23 highlighted the need for India to develop a carefully crafted multi-dimensional mineral policy to address the challenges posed by the uneven distribution of rare earth elements.
Lithium is a mineral that is in focus, as it is required to fuel India's energy transition target.
Manufacturing lithium-ion (Li-ion) batteries, which are used in electric vehicles and battery storage, requires lithium, which is a key component. According to the NITI Aayog, meeting the ambitious national electric-vehicle (EV) adoption targets of 30 per cent for private cars, 70 per cent for commercial vehicles, and 80 per cent for two- and three-wheelers by 2030 will be crucial, and lithium will play a significant role in achieving these targets.
According to data from the Ministry of Commerce, India relies solely on imports to meet its lithium demand, with Li-on battery imports reaching $2.8 billion in 2022-23. Hong Kong and China account for over 95% of these imports.
The country experienced a more than twofold increase in imports last year.
The Geological Survey of India (GSI) is currently intensifying its exploration efforts for critical minerals, with approximately one-third of all digs now dedicated to this purpose. The Centre aims to complete the auction of the 5.9 million-tonne (mt) lithium reserves discovered in Reasi district, Jammu & Kashmir, in February earlier this year.
Although India possesses nickel, cobalt, molybdenum, and heavy rare earth, further exploration is necessary to determine the quantities available.
Beyond this, the Centre for Economic and Social Progress (CSEP), a Delhi-based public policy think tank, has identified 43 specific minerals that are important for India, including antimony, gallium, graphite, nickel, niobium, and strontium.
In a paper published last year, the CSEP stated that "minerals such as these are critical for India" and that many of them are necessary for the production of green technologies, high-tech equipment, aviation, and national defence.
Earlier this year, India and Australia formed a partnership to enhance cooperation on mineral projects and establish secure supply chains for critical minerals.
According to an official, "The Critical Minerals Investment Partnership with Australia is expected to serve as a playbook for future bilateral engagements in this area. It is significant because Australia is responsible for almost half of the world's lithium production. It is the second-largest producer of cobalt and the fourth-largest overall producer of rare earth elements."
PM Modi is on a 3-day State visit to the US.
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