Mineral Security Partnership (MSP)

Context: 

India has been inducted into the Mineral Security Partnership (MSP) to catalyse public and private investment in critical mineral supply chains globally.

About Mineral Security Partnership (MSP):

• It is a global initiative announced by the US and other key partner countries in June 2022 to bolster critical mineral supply chains. It is also known as the critical minerals alliance.
• The focus is primarily on the supply chains of critical minerals such as cobalt, nickel, lithium and the 17 “rare earth” minerals.
• Objectives of the MSP include:
  • Strengthened information sharing between partner countries
  • Increased investment in secure critical minerals supply chains
  • Developed recycling technologies
• Aim:
  • To ensure that critical minerals are produced, processed and recycled in a way that helps countries secure a stable supply of critical minerals for their economies. 
  • To weaken China’s grip on supplies of critical minerals worldwide.
• Member Countries: 
  • US, Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, UK, the European Commission, Italy,  India.

Significance of MSP: 

• Alternative to China: The alliance is seen as primarily focused on evolving an alternative to China, which has created a processing infrastructure in rare earth minerals and has acquired mines in Africa for elements such as Cobalt.
• Electric Vehicle Revolution: It will help India in a shift in the mobility space through the conversion of a large part of public and private transport to electric vehicles. 
• Sustainable Critical Energy Minerals Supply Chains: Accelerate the development of diverse and sustainable critical energy minerals supply chains globally.

What are Critical Minerals?:

• A critical mineral is a mineral resource that is essential to the economy and has high economic vulnerability and high global supply chain risk.
  • Critical minerals have a supply chain at risk of disruption. 
• Individual countries develop their own list of critical minerals depending on the importance of particular minerals in the industrial sector and the strategic assessment of supply risks.
• Major Critical Minerals: Graphite, lithium and cobalt. Many critical minerals, including Rare Earth (RE) minerals and metals such as lithium, gallium, tellurium, and indium,
  • They are critical for making semiconductors and high-end electronics manufacturing. 
  • They are also used in manufacturing fighter jets, drones, and radio sets.
• Uses: 
  • To manufacture advanced technologies, such as mobile phones, tablets, electric vehicles, solar panels, wind turbines, fibre optic cables, and defence and medical applications.
• Top Producers: According to the International Energy Agency, the major producers of critical minerals are China, Congo, Chile, Indonesia, South Africa, and Australia. China has global dominance in terms of processing.

India’s Concerns:

• Some elements classified as heavy RE elements are not available in the country in extractable quantities. It relies heavily on China for HREE.
• India has recently witnessed a shift from public and private transport to electric vehicles. 
  • This underlines the need to secure the supply of critical minerals.
• India needs a multi-dimensional mineral policy to address the issues posed by the uneven distribution of rare earth elements, the Economic Survey 2022-23 had pointed out.

Challenges in ensuring resilient critical minerals supply chains:

• Covid Disruption in Supply Chain: China, the most dominant player in the critical mineral supply chains, still struggles with Covid-19-related lockdowns.
  • As a result, the extraction, processing and exports of critical minerals are at risk of slowdown.
• Russia-Ukraine war: Russia is a significant producer of nickel, palladium, titanium sponge metal, and the rare earth element scandium.
  • Ukraine is one of the major producers of titanium and has reserves of lithium, cobalt, graphite, and rare earth elements, including tantalum, niobium, and beryllium.
  • The war between the two countries has implications for these critical mineral supply chains.
• Developed countries have jointly drawn up partnership strategies, including the Minerals Security Partnership (MSP) and G7’s Sustainable Critical Minerals Alliance, while developing countries have missed out.
• Russia-China Partnership: As the balance of power shifts across continents and countries, the critical mineral supply chains may get affected due to the strategic partnership between China and Russia.
• Import Dependence: India does not have many mineral reserves required in renewable energy technologies necessitating reliance on foreign partners to meet domestic needs.

Way Forward:

• Reconnaissance and Exploration: The reconnaissance and exploration of minerals must be encouraged, with particular attention given to deep-seated minerals.
• Mine allocation: An innovative regime must be devised to allocate critical mineral mining assets, which adequately incentivises private explorers, including ‘junior’ explorers.
• Mineral Diplomacy: India must actively engage in bilateral and plurilateral arrangements for building assured and resilient critical mineral supply chains.
• Regular update of assessment: The assessment of critical minerals for India needs to be updated every three years to keep pace with changing domestic and global scenarios.
• National critical minerals strategy: A national critical minerals strategy for India, underpinned by the minerals identified in this study, can help focus on priority concerns in supply risks, domestic policy regimes, and sustainability.

News Source: The Indian Express