What is Minerals Security Partnership that seeks to end China's dominance and why is India keen to join it?

In order to break the dominance and reduce dependence on China in mining and processing rare earth minerals, the United States recently announced the formation of a global alliance called the Mineral Security Partnership (MSP).

Apart from the US, the other countries to have joined this partnership are: Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, the UK, and the European Commission.

The partnership was announced at the world’s largest mining event, held in Toronto in June.

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“Demand for critical minerals, which are essential for clean energy and other technologies, is projected to expand significantly in the coming decades. The MSP will help catalyse investment from governments and the private sector for strategic opportunities — across the full value chain — that adhere to the highest environmental, social, and governance standards,” the US State Department said in a statement issued on June 14.

However, as per reports, there have been growing concerns in India over being left out of the US-led partnership that seeks to end dependency on China. And New Delhi’s apprehension is quite justified given that the country has been pushing for EV and electronics, for which rare earth minerals are needed.

What is MSP?

Minerals Security Partnership (MSP) is an ambitious new alliance formed by the US to secure supply chains of critical minerals. It comes in the backdrop of recorded demand for critical minerals, which are essential forclean energyand other technologies.

The goal of the alliance is to ensure that critical minerals are produced, processed, and recycledin a manner that supports the ability of countries to realise the full economic development benefit of their geological endowments.

The focus would be on the supply chains of minerals such asCobalt, Nickel, Lithiumand also the 17 “rare earth” minerals.

What is a critical mineral?

There is no global definition of critical minerals, but essentially, they are mineral deposits with high economic vulnerability and high global supply chain risk.

Rare earth (RE) comprises seventeen elements and are classified as light RE elements (LREE) and heavy RE elements (HREE).

There is an immense range of these of course and many countries already have their own specific lists of what they currently consider critical minerals – depending on their industrial production requirements.

But globally, there is a gap between projected supply and projected demand for many critical minerals by the end of this decade, especially in cobalt and lithium.

What are major critical minerals?

The major critical minerals are Graphite, Lithium and Cobalt. They are used for making EV batteries and are also critical for making semiconductors and high-end electronics manufacturing.

These minerals are also used in manufacturing fighter jets,drones,radio setsand other critical equipment, hence it is critical for aerospace, communications and defence industries.

Who are the top producers of critical minerals?

According to a report released by the International Energy Agency in 2021 and subsequently updated in March 2022, the major producers of critical minerals globally are Chile, Indonesia, Congo, China, Australia and South Africa.

In terms of processing, China rules the roost. While others include Indonesia, Chile and Japan.

Notably, none of these countries, except Japan and Australia, are represented in the MSP.

India’s concerns

Some of the rare earth elements available India are: Lanthanum, Cerium, Neodymium, Praseodymium and Samarium. While others classified as heavy RE elements such as Dysprosium, Terbium, Europium are not available in extractable quantity.

India relies heavily on China for HREE, which is one of the leading producers with an estimated 70 per cent of the global production.

Hence, there is a lot at stake for India. Which is why Union Finance Ministry, according to The Indian Express, have reportedly communicated with the Ministry of External Affairs to explore the possibility of how New Delhi can join the 11-member group.

(With inputs from agencies)