CURRENT AFFAIRS ( 15 December 2024) 

• Canada and Brazil: India is exploring cooperation in mining and critical mineral supply chains through bilateral engagements.
• Collaboration with Central Asia: In November 2024, India and Kazakhstan formed a joint venture called IREUK Titanium Limited to produce titanium slag in India.
  • India has proposed the establishment of an India-Central Asia Rare Earths Forum to leverage the region’s rich resource base.
• Multilateral Partnerships:
  • Mineral Security Partnership (MSP): India joined as the 14th member in June 2023 to promote resilient and responsible critical mineral supply chains globally. 
  • Quad and Indo-Pacific Economic Framework (IPEF): India participates in these frameworks to strengthen clean energy technologies and critical mineral supply chain resilience.
  • G20 and G7: India has actively advocated for principles ensuring equitable and resilient supply chains for critical minerals through these platforms.

• • International Energy Agency: India’s Ministry of Mines signed a Memorandum of Understanding with the International Energy Agency to streamline policies, regulations, and investment strategies for the critical minerals sector in line with global best practices.
• Engagement with the Global South:
  • India has initiated partnerships with African nations, including Zambia, Congo, and Namibia, for sourcing minerals like copper and cobalt.
  • These collaborations emphasize ethical sourcing, fair practices, and diversifying mineral supply chains.

Challenges in India’s Mineral Diplomacy

• Heavy Import Dependence: India is almost entirely dependent on imports for critical minerals like lithium, cobalt, and nickel.
  • In FY 2023-24, India spent over ₹34,000 crores on importing lithium, cobalt, nickel, and copper, with 70–80% of lithium imports coming from China.
  • India procured 50,000 tonnes of amorphous graphite and 5,300 tonnes of nickel oxide from China between 2017 and 2023.
• China’s Dominance in Supply Chains: China controls approximately 60% of global production and 85% of processing capacity for critical minerals, including rare earths, lithium, and cobalt.
  • China processes 59% of lithium and 73% of cobalt globally, dominating the midstream and downstream value chains.
  • In 2023, China imposed export restrictions on graphite and other minerals, disrupting global supply chains.
• Lack of Domestic Processing Capabilities: India lacks the infrastructure for refining and processing critical minerals, which are essential for downstream industries.
  • Most mineral blocks auctioned in India remain unsold due to insufficient domestic processing technologies.
• Technological and R&D Deficits: There is limited investment in research and development for extraction and refining technologies.
  • Deep-seated minerals like cobalt and nickel remain unexplored in India due to the absence of advanced mining techniques.
• Geopolitical Vulnerabilities: Dependence on a few countries for critical minerals exposes India to supply disruptions due to geopolitical tensions.
  • During the 2010 China-Japan dispute, China imposed export bans on rare earths, severely impacting Japan’s tech industry.
  • The ongoing U.S.-China rivalry has seen tit-for-tat restrictions on critical mineral exports, highlighting the risks of concentrated supply chains.
• Insufficient Private Sector Participation: The private sector’s involvement in exploration and processing is limited due to unclear policies and high risks.
  • Despite amendments to the Mines and Minerals Act in 2023, auctions for critical mineral blocks failed to attract sufficient private sector interest.
• Environmental and Ethical Concerns in Sourcing: Global mining practices often face scrutiny for human rights violations and environmental degradation.
  • Allegations against Chinese firms in the Democratic Republic of Congo include child labor and forced evictions in cobalt mining operations.

Way forward

• Policy Reforms and Incentives: India needs to accelerate domestic mining and processing capabilities through viability gap funding and increased R&D investments.
  • Policies should provide clear incentives for private sector engagement across the critical mineral value chain.
• Diversification of Supply Sources: India must reduce its reliance on China by strengthening partnerships with countries in Latin America, Africa, and Australia.
  • The country should explore alternative sources for synthetic graphite, including Mozambique, Madagascar, and Brazil.
• Strengthening Multilateral Engagements: India should take a leading role in global dialogues for equitable access to critical minerals through frameworks like MSP and Quad.
  • Multilateral engagements must focus on building resilient and sustainable supply chains for these vital resources.
• Technological and R&D Collaboration: India should partner with advanced economies like the United States and Japan to acquire cutting-edge refining and recycling technologies.
  • Investments in recycling technologies can help reduce dependency on raw material imports and create a circular economy for critical minerals.
• ESG (environmental, social, and governance) compliance: India must ensure ESG (environmental, social, and governance) compliance in its sourcing practices, especially in partnerships with countries like Congo and South American nations.

Conclusion

Mineral diplomacy is essential for India’s economic development and strategic autonomy. Addressing challenges related to private sector participation, diplomatic capacity, and sustainable partnerships is crucial for strengthening India’s mineral security efforts. With a comprehensive and forward-looking approach, India can achieve long-term self-reliance in critical minerals.