Washington, Nov 19 (IANS): India joined a select group of countries in June that is building a supply chain for critical minerals that, among other things, are key to transitioning to clean energy with some prodding from the US in the run-up to Prime Minister Narendra Modi’s state visit.
The major factors aiding India’s induction into this group included the sheer size of its market, criticality in meeting the global goals for mitigating greenhouse gases and, as the voice of the Global South, a phrase used for less developed and developing countries.
The Minerals Security Partnership, as the group founded in June 2022 is called, seeks to offer an alternative to China’s dominance in mining and processing critical minerals such lithium, cobalt, copper and others.
Lithium is a key component of batteries and demand for it is estimated to go up by more than 40 times in view of the large-scale transitioning to electric vehicles of all kinds -- cars, buses and two-wheelers -- over the next couple of years.
Australia, a member of the MSP, is the largest producer of this mineral and China is the third largest. These countries want to put together a supply chain in critical minerals -- from exploration to mining to processing to distribution -- that is safe from disruptions, the kind triggered by unforeseen events such as the Covid-19 pandemic, or manipulation by monopoly majority stakeholders.
Geoffrey Pyatt, the US Assistant Secretary of State for Energy Resources, set the conversation rolling during a visit to India prior to the Prime Minister’s visit.
Though he wouldn't say that this was like an "American demand", he said this when asked if India sought membership of the group or it was persuaded to join it.
"We were both pushing on an open door. And it was, I think, one of the real advantages of it, aside from what I talked about earlier, which is the converging values, is India's size."
India, according to Pyatt, "brings a critical mass, both in terms of the size of the market, but the industrial potential, and the significance in terms of moving the needle on our climate goals.”
India also offered the MSP process a window to the global south, which is made of countries that are less developed or developing.
“This is why getting India into the MSP was so important, because India uniquely, unlike the G7 countries and Australia and others who were sort of founding parts of the MSP process, India is able to talk to both worlds and lives in both worlds," Pyatt said.
"India is one of the world's largest economies and is a major economy in itself and sits at the high table. But India also brings a unique credibility to the developing world when it talks to the developing world and talks on these issues of standards. So that was a part of the conversation that we had in making the case and reaching a US government consensus on the value of bringing India into MSP,” he added.
The MSP member countries are the seven G7 countries that are the world’s richest and most developed — the US, Canada, France, Germany, the UK, Italy and Japan; the European Union (represented by the European Commission); and Australia, Finland, Norway, the Republic of Korea, Sweden and, now, India.
Around the time of its induction into the group, India released a list of 30 critical minerals -- antimony, beryllium, bismuth, cobalt, copper, gallium, germanium, graphite, hafnium, indium, lithium, molybdenum, niobium, nickel, PGE, phosphorous, potash, REE, rhenium, silicon, strontium, tantalum, tellurium, tin, titanium, tungsten, vanadium, zirconium, selenium and cadmium.
The number of critical minerals varies among countries depending upon their demand and usage. The US, for instance, has designated 50 as critical minerals.
A report released by the Indian ministry of mines in June, the same month as Modi’s state visit, describes critical ministers as “minerals that are essential for economic development and national security”.
It went on to say that the “lack of availability of these minerals or concentration of extraction or processing in a few geographical locations may lead to supply chain vulnerabilities and even disruption of supplies.
"The future global economy will be underpinned by technologies that depend on minerals such as lithium, graphite, cobalt, titanium, and rare earth elements."
"These are essential for the advancement of many sectors, including high-tech electronics, telecommunications, transport, and defence. They are also vital to power the global transition to a low carbon emissions economy, and the renewable energy technologies that will be required to meet the ‘Net Zero’ commitments of an increasing number of countries around the world. Hence, it has become imperative to identify and develop value chains for the minerals which are critical to our country."
The geographical concentration that the report cautions about is a thinly veiled reference to China, which is the world’s largest producer and processor of many of these critical minerals.
India is a net importer of 10 of the 30 designated minerals and a bulk importer of four of the key components of a battery, including lithium. It imports this mineral from Chile, which is the second largest producer, Russia, China, Ireland and Belgium.
India is a net importer also of cobalt, another key component of batteries; and imports most of it from China.
Pyatt recalled a visit to the Mahindra’s Pune facility for electric vehicles.
“I was very excited to hear from them and to hear from Anand Mahindra (the chairperson of Mahindra & Mahindra), how aggressively they are pursuing electrification and you know,” said the American diplomat with possibly the longest experience dealing with India.
But he was sorely “disappointed” when he asked the engineers where they got the batteries.
“They all kind of looked underneath the table and they said it's from CATL. Hundred per cent.”
CATL is Contemporary Amperex Technology Co. Limited, a Chinese battery giant that specialises in the manufacturing of lithium-ion batteries for electric vehicles and energy storage systems.