India-Australia Critical Minerals Investment Partnership

In News: India and Australia decided to strengthen their partnership in the field of projects and supply chains for critical minerals.

• Australia confirmed that it would commit a $5.8 million to the three-year India-Australia Critical Minerals Investment Partnership.

What are critical minerals?

• Critical minerals are elements that are the building blocks of essential modern-day technologies, and are at risk of supply chain disruptions.
• These minerals are used everywhere from making mobile phones, computers to batteries, electric vehicles and green technologies like solar panels and wind turbines.
• It mostly include graphite, lithium and cobalt, which are used for making EV batteries; rare earths that are used for making magnets and silicon which is a key mineral for making computer chips and solar panels.

Why is this resource critical?

• As countries around the world scale up their transition towards clean energy and digital economy, these critical resources are key to the ecosystem that fuels this change.
• Any supply shock can severely imperil the economy and strategic autonomy of a country over-dependent on others to procure critical minerals.
• But these supply risks exist due to rare availability, growing demand and complex processing value chain.
• Many times the complex supply chain can be disrupted by hostile regimes, or due to politically unstable regions.

What is the China ‘threat’?

• According to the 2019 USGS Mineral Commodity Summaries report, China is the world’s largest producer of 16 critical minerals.
• China, according to a report by the International Energy Agency, is responsible for some 70% and 60% of global production of cobalt and rare earth elements, respectively, in 2019.
• The level of concentration is even higher for processing operations, China’s share of refining is around 35% for nickel, 50-70% for lithium and cobalt, and nearly 90% for rare earth elements.
• It also controls cobalt mines in the Democratic Republic of Congo, from where 70% of this mineral is sourced.
• In 2010, China suspended rare earth exports to Japan for two months over a territorial dispute.
• The decision made the market prices of RREs jump anywhere between 60% to 350%.

What are countries around the world doing about it?

USA

• After reviewing the vulnerabilities in its critical minerals supply chains and found that an over-reliance on foreign sources US has shifted its focus on expanding domestic mining, production, processing, and recycling of critical minerals and materials.

India

• India has set up KABIL or the Khanij Bidesh India Limited, a joint venture of three public sector companies, to ensure a consistent supply of critical and strategic minerals to the Indian domestic market.
• Australia’s Critical Minerals Facilitation Office (CMFO) and KABIL had recently signed an MoU aimed at ensuring reliable supply of critical minerals to India.

United Kingdom

• The UK recently unveiled its new Critical Minerals Intelligence Centre to study the future demand for and supply of these minerals.

Other Countries

• In June last year, the US, Canada and Australia had launched an interactive map of critical mineral deposits with an aim to help governments to identify options to diversify their critical minerals sources.

Source: Indian Express

Previous Year Question

Q.1) Recently, India signed a deal known as ‘Action Plan for Prioritization and Implementation of Cooperation Areas in the Nuclear Field’ with which of the following countries? (2019)

1. Japan
2. Russia
3. The United Kingdom
4. The United States of America