India’s Mineral Future

The global transition to clean energy has sparked rising demand for critical minerals like lithium, cobalt, and graphite that are vital components in batteries, solar panels, wind turbines and electric vehicles. As countries race to secure supplies of these scarce minerals, India is leveraging a new US-led alliance called the Minerals Security Partnership (MSP) to gain better access to mineral reserves across the world.

The Minerals Security Partnership (MSP)

• Launched in June 2022 by the United States with the initial participation of 10 countries – Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, the United Kingdom, and the United States – along with the European Union
• The key motivation was the over-reliance on China for critical mineral supplies and the disruption risks it poses
• China controls over 60% of lithium processing, 80% of rare earths supply chains and 60% cobalt refining globally
• Aims to identify global critical mineral reserves, map supply chains, boost responsible domestic mining and processing, and increase international collaboration to close mineral supply gaps
• India joined as the 11th member in early 2023 based on its rising clean energy ambitions
• Securing overseas mineral assets through joint ventures is a major area of cooperation

India’s Surging Demand for Critical Minerals

India has set ambitious renewable energy targets to support its energy security and climate change goals:

• 175 gigawatts (GW) in renewable energy capacity by 2022
• 450 GW by 2030
• Net-zero emissions target by 2070

To provide storage solutions for increasing solar and wind generation, India’s lithium-ion battery demand is projected to exponentially rise:

• From current 4 GWh annual production to 20 GWh by 2030
• Leading to a lithium demand of over 1.2 million tonnes by 2030

However, India falls short on domestic critical mineral reserves:

• Fifth largest producer of graphite but little native deposits of lithium or cobalt
• Less than 1% global reserve share for lithium versus 55% for Chile
• Imports nearly 100% of its lithium and cobalt consumption

This is where alliances like MSP prove invaluable for India to leverage mineral assets in countries like Australia and Canada to ensure security of supply.

India’s State-Owned Firms Lead Critical Mineral Charge

Recognizing India’s increasing import reliance on China for electronics and clean energy technology, Central PSUs are driving strategic mineral asset acquisition across continents.

Key overseas investments planned include:

Coal India Limited

1. • Foray into Botswana, Argentina and Bolivia
   • $1 billion planned investment in lithium and cobalt assets

NLC India Limited

1. • Pick up 5% equity stake in Critical Elements Lithium mining in Canada
   • 25% equity target in Australian lithium major AVZ Mining’s refinery

Hindustan Copper Limited

1. • Aims to secure 90% stake in nickel project in Papua New Guinea
   • Would meet 20% of India’s annual nickel requirement for electric vehicles

KABIL

Khanij Bidesh India Ltd. (a special entity carved out by National Aluminium Co Ltd, Mineral Exploration Corp Ltd and MECON Ltd)

1. • Mandated to acquire strategic overseas mineral assets
   • Shortlisted 5 lithium and 12 copper mines in Australia, Argentina, Bolivia and Chile

Joint collaborations in exploration and technical support are also underway with mining giants like Rio Tinto and Resolute Mining.

Key Advantages for India from MSP

While self-reliance through domestic mineral capacity enhancement remains India’s long-term roadmap, the MSP helps mitigate critical near-term needs in multiple ways:

• Gain preferential access to surveyed mineral blocks in nations like Canada, Australia and the US rather than compete in open auctions
• Access latest technological innovations and mining environment standards followed globally
• Get skilled talent support across exploration, geo-sciences and commercial mining activities
• Co-fund mining projects to secure offshore mineral equity rather than pure imports
• Establish reliable supply chains not just for India’s domestic needs but also towards becoming an exporting hub for clean energy technologies in the developing world

As the world wakes up to impending mineral supply crunches, India’s strategy of leveraging global partnerships while ramping up domestic mineral production will be crucial to securely power its renewable future.