In a recent development, India and Australia have achieved a significant milestone by investing in critical minerals projects. This move aims to develop supply chains between the two nations and emphasizes the importance of critical minerals for modern-day technology and industry.
Understanding Critical Minerals
Critical minerals are essential elements that act as building blocks for necessary modern technologies. They face potential disruption in supply chains. Some examples include copper, lithium, nickel, cobalt, and rare earth elements, all of which are key components in an array of clean energy technologies. These technologies range from wind turbines and power grids to electric vehicles. As the world accelerates the transition to clean energy, it’s projected that the demand for these minerals will skyrocket.
India’s Policy on Critical Minerals
The Department of Science and Technology in India developed the Critical Minerals Strategy for India in 2016, in association with the Council on Energy, Environment and Water. The aim was to emphasize India’s resource requirements until 2030. This strategy identified 49 minerals that are crucial for India’s future economic growth.
The Critical Minerals Investment Partnership (CMIP)
The CMIP has chosen two lithium and three cobalt projects for its due diligence. Australia is the world’s leading producer of almost half of the world’s lithium and stands as the second-largest producer of cobalt and the fourth-largest producer of rare earths. The investments by the partnership aim to create new supply chains supported by essential minerals processed in Australia. This would assist India in reducing emissions from its energy network and establishing itself as a hub of manufacturing, including for electric vehicles.
India-Australia Trade Relations Overview
India and Australia share an excellent bilateral relationship, which has seen significant evolution over recent years. This relationship is rooted in shared values such as parliamentary democracies, Commonwealth traditions, long-standing people-to-people ties, and high-level interaction. The India-Australia Comprehensive Strategic Partnership launched during the India-Australia Leaders’ Virtual Summit in June 2020 acts as the cornerstone of bilateral relations.
Critical Minerals Supply: Global Actions
In 2021, the United States ordered a review of vulnerabilities in its critical minerals supply chains. The review found that over-reliance on foreign sources and adversarial nations posed national and economic security threats. India has set up KABIL or Khanij Bidesh India Limited, a joint venture of three public sector companies. Its purpose is to ensure a steady supply of critical and strategic minerals to the Indian domestic market.
Other countries are also making strides in this sector. In 2020, the US, Canada, and Australia launched an interactive map of critical mineral deposits, which aids governments in diversifying their sources of critical minerals.
Conclusion of the Critical Minerals Investment Partnership
The CMIP between Australia and India signifies a critical milestone in bilateral relations. Both countries must work in unison to ensure the alliance’s proper implementation and explore opportunities for collaborative research and development together. The vital minerals industry might experience changes due to the CMIP, resulting in growth for both countries’ economies.
This cooperation between India and Australia serves as an informative, practical case for the UPSC Civil Services Examination. It can help candidates understand how the shortage of ‘rare earth metals’ has become a concern due to export restrictions by dominant producers and the growing demand for these elements in electronic manufacturing.