Government Schemes

How will Minerals Security Partnership (MSP) affect the Mineral Processing and Recycling Sector?

India has become a member of the Minerals Security Partnership (MSP), which is a group of 14 advanced nations led by the United States. By joining the MSP, India has achieved a unique distinction as the sole developing country to be a part of this esteemed alliance, known as the critical minerals club. Established in June 2022, the partnership aims to ensure the stability and reliability of critical mineral supply chains. India’s inclusion in the Mineral Security Partnership (MSP) catalyzes promoting both public and private investment in critical mineral supply chains globally.

Minerals Security Partnership (MSP)

In June 2022, the United States and several essential partner nations introduced a worldwide effort to enhance the resilience of critical mineral supply chains. This initiative, commonly referred to as the critical minerals alliance, focuses primarily on the supply chains of essential minerals such as cobalt, nickel, lithium, and the 17 “rare earth” minerals^[1]. MSP has set forth several objectives, including improving the exchange of information among partner countries, encouraging greater investment in secure supply chains for critical minerals, and advancing the development of recycling technologies.

Objectives of Minerals Security Partnership

The main objectives of the Minerals Security Partnership (MSP) are as follows:

• Ensuring the production, processing, and recycling of critical minerals in a manner that enhances countries’ ability to secure a reliable supply for their economies.
• Diminishing China’s dominance over critical mineral supplies on a global scale.

Member countries of MSP

Member Countries of the Minerals Security Partnership (MSP) include:

• United States
• Australia
• Canada
• Finland
• France
• Germany
• Japan
• Republic of Korea
• Sweden
• United Kingdom
• European Commission
• Italy
• India

Significance of MSP

The significance of a Minerals Security Partnership (MSP) is as follows:

• China Alternative: The alliance’s primary objective is to establish an alternative to China, which has developed a strong processing infrastructure for rare earth minerals and acquired mines in Africa for elements like Cobalt.
• Electric Vehicle Revolution: The alliance will support India in transitioning a significant portion of public and private transportation to electric vehicles, contributing to the shift in the mobility sector.
• Sustainable Supply Chains: The alliance aims to expedite the development of diverse and sustainable supply chains for critical energy minerals on a global scale.

Critical Minerals in Minerals Security Partnership (MSP)

A critical mineral is a mineral resource that holds significant importance for the economy and is highly susceptible to economic vulnerabilities and risks in global supply chains. Here are the key points:

• Critical minerals possess supply chains that are at a high risk of disruption.
• Each country establishes its own inventory of critical minerals based on the minerals’ significance in the industrial sector and the strategic evaluation of supply risks.
• Some major critical minerals include graphite, lithium, and cobalt. Also, rare earth (RE) minerals and metals like lithium, gallium, tellurium, and indium are critical to producing semiconductors and for advanced electronics manufacturing.
• These critical minerals are also utilized to manufacture fighter jets, drones, and radio sets.

Uses of Critical Minerals

The availability of critical minerals is essential to produce cutting-edge technologies like mobile phones, tablets, electric vehicles, solar panels, wind turbines, fibre optic cables, and applications in defence and medical fields. Here are the important points:

• Top Producers: According to the International Energy Agency, China, Congo, Chile, Indonesia, South Africa, and Australia are the main producers of critical minerals.
• China holds a dominant position globally, particularly in processing critical minerals.

Rare Earth (RE) Elements

Rare Earth (RE) elements consist of a group of 17 elements, categorized into two groups:

• Light RE elements (LREE)
• Heavy RE elements (HREE)

The rare earth elements (REE) include the 15 lanthanides (atomic numbers 57 to 71 in the periodic table) along with Scandium (atomic number 21) and Yttrium (atomic number 39).

• Availability of Rare Earth Elements (REE) in India: Some REEs, such as Lanthanum, Cerium, Neodymium, Praseodymium, and Samarium, are present in India.
• India has the fifth-largest reserves of rare earth elements globally, nearly twice as much as Australia.
• However, certain REEs classified as heavy rare earth elements (HREEs), including Dysprosium, Terbium, and Europium, are not found in extractable quantities in Indian deposits.

• Rare earth minerals play a crucial role in the functionality of various advanced technological devices.
• They are utilized in the production of computer hard drives, cellular telephones, flat-screen monitors and televisions, as well as electric and hybrid vehicles.

India’s Concerns

Certain heavy rare earth elements (HREEs) are not found in extractable quantities within the country, resulting in heavy dependence on China for their supply. India has observed a notable transition from traditional modes of transportation to electric vehicles, highlighting the importance of ensuring a secure supply of critical minerals. The Economic Survey 2022-23 emphasized the necessity of a comprehensive mineral policy in India to address the challenges posed by the uneven distribution of rare earth elements.

Ways to deal with the concerns

• Reconnaissance and Exploration: There is a need to promote the reconnaissance and exploration of minerals, with a specific focus on deep-seated minerals.
• Mine Allocation: An innovative system should be developed to allocate critical mineral mining assets, offering sufficient incentives to private explorers, including smaller-scale explorers.
• Mineral Diplomacy: India should actively participate in bilateral and multilateral arrangements to establish reliable and resilient critical mineral supply chains.
• Regular Assessment Updates: The assessment of critical minerals in India should be updated at least every three years to keep up with evolving domestic and global conditions.
• National Strategy: India should formulate a national critical minerals strategy incorporating the minerals identified in this study. This strategy will address priority concerns related to supply risks, domestic policy frameworks, and sustainability.

Recent Partnerships

• India and Australia have established the India-Australia Critical Minerals Investment Partnership to enhance their collaboration in critical minerals projects and supply chains. In March 2022, Australia committed $5.8 million to support this partnership over a three-year period. Through this initiative, India can access resources from Australia to fulfil the increasing demand for critical minerals.

• In the middle of 2020, India established a partnership with an Argentinian firm through a newly formed state-owned company. The objective of this collaboration was to conduct joint exploration for lithium in Argentina, a South American country known to possess the world’s third-largest reserves of this metal.

Conclusion

The Minerals Security Partnership (MSP) stands as a crucial global initiative aimed at securing critical mineral supply chains and reducing dependence on a single dominant player. By bringing together developed countries, including the United States, Australia, Canada, and India, the MSP seeks to strengthen information sharing, promote investment in secure supply chains, and advance recycling technologies. As the world increasingly relies on critical minerals for various industries, such as electronics, transportation, and renewable energy, the MSP serves as a platform for cooperation and strategic planning to ensure a stable and sustainable supply of these essential resources. Before beginning a business, it is recommended to speak with a legal expert firm/ consultant to establish and understand the legal requirements for acquiring a business license in India.

FAQ

Read our Article: Registration Process For Bio-Stimulant After The FCO Amendment Order