Prime Minister Modi, on his go to to the United States to satisfy with President Joseph Biden, prioritized pathways for each nations to work collectively on advancing the targets of power transition. On this go to, Prime Minister Modi introduced that India will be a part of the United States-led Mineral Security Partnership (MSP) as a part of a multi-country platform to assist crucial mineral provide chains. This has created a dynamic of making collaborative pathways round crucial mineral manufacturing, processing and recycling with an total goal of maximizing financial improvement and leveraging geological sources accessible to completely different nations. By adhering to the very best requirements of environmental, social, and governance practices, the MSP seeks to stimulate each governmental and personal sector investments in strategic alternatives all through your entire worth chain. India becoming a member of this platform maintain important implication for India and for the worldwide provide chain of crucial minerals.

Within India’s power transition targets, a big precedence for India has been placed on increasing manufacturing and entry to electrical autos (EVs). This is an space during which India’s participation within the MSP can have a robust and constructive influence. Critical minerals function a driving pressure in expediting the provision of electrical autos. An electrical automotive necessitates six occasions the mineral sources in comparison with a traditional inside combustion engine (ICE) car. The efficiency, longevity and power density of batteries are intrinsically linked to minerals equivalent to lithium, nickel, cobalt, manganese and graphite.

The EV provide chain faces important challenges as a result of consolidation of extraction and processing actions in particular geographical areas, particularly when crucial minerals contribute to 50-70% of the price of the battery. As it stands at the moment, mining for crucial minerals is predominantly primarily based in a choose few nations, with Australia (lithium), Chile (copper and lithium), China (graphite, rare-earth components), the Democratic Republic of Congo (cobalt), and Indonesia (nickel) holding key positions. 

This focus turns into much more pronounced in the course of the refining part, the place China has emerged because the unique supplier of pure graphite, and a significant supplier of manganese, cobalt and lithium. Establishing new tasks of mining, refining, and processing capabilities can take a considerably lengthy intervals, which in itself is a considerable obstacle to the growth of the EV business. India’s important dependence on imported lithium is steadily rising given the escalating demand for EVs in addition to for powering digital {hardware}. This was clear in final 12 months’s commerce information that India’s imports of Lithium-Ion cells amounted to $2.8 billion, surpassing the incentives prolonged by the production-linked incentive (PLI) scheme designed to foster superior chemistry cell manufacturing.

In this case, the MSP generally is a dynamic instrument to assist the growth of the collaborations throughout the EV ecosystem around the globe. India has the chance to discover avenues for safeguarding its crucial mineral provide chains by participating with companions just like the United States and Australia – a outstanding world participant in lithium manufacturing. The extraction methods for lithium from numerous sources equivalent to brines, rocks, and seawater maintain potential areas of exploration for India. This might considerably improve India’s home EV manufacturing capabilities and capacities, aligning with the broader goals of the MSP.

The collaboration between the United States and India, and different companions, will prolong past their joint efforts in Lithium manufacturing and recycling.

The US and India, and different companions can discover cooperative ventures aimed toward investing in mining operations inside nations just like the Democratic Republic of Congo, Indonesia, and Peru, which signify important manufacturing of cobalt, nickel, and copper respectively. India additionally stands to realize from the switch of mining applied sciences. Additionally, India has just lately allowed non-public enterprises to interact in lithium mining. Although the timeline for these tasks can be important, this positions India as a pivotal companion for sure sectors like EV and renewable and clear power. India has the potential to focus efforts on bolstering its upstream capabilities, together with refining, inside its borders by means of productive collaborations with member nations.

 The MSP also can open up new skilling and employment alternatives in mining, along with potential joint analysis and improvement in crucial minerals, modern storage supplies, manufacturing, extraction, and recycling. This will be developed throughout sectors which require completely different crucial minerals. There is critical house to judge crucial mineral provide chain information and monitoring, to make sure sustainable use and motion of provides. India’s proactive strategy ought to prolong in the direction of cultivating avenues for collaborative analysis and improvement with fellow members. This initiative is essential for devising product design methods that mitigate dependence on crucial minerals, amplify capabilities for reuse and recycling, diversify efforts and consequently alleviate pressure on main mineral sources.

A possible space of collaboration can embrace the extraction of crucial minerals from the seabed, an space the place each the United States and India can take part. A spotlight of India’s National Deep Oceans Mission is the event of submersible applied sciences, which may additionally play a crucial position right here. The seabed incorporates minerals equivalent to lithium, cobalt, manganese, and graphite, which have been offered as crucial in lists outlined by India’s ministry of mines, and the US Department of the Interior by means of the US Geological Survey.

India’s participation in MSP generally is a increase for all companions. International cooperation would be the key to sturdy world provide chains and the mitigation of geopolitical uncertainties on this space. India’s strategic transfer ought to contain harnessing the MSP as a platform to forecast provide and demand developments over the long run. This consists of fostering innovation in recycling and applied sciences with decrease crucial mineral reliance, and selling the institution of provide chains which can be each accountable and sustainable. This equilibrium must be delicately harmonized with financial imperatives, environmental issues, and the well-being of native communities. India stands to not solely fortify home manufacturing in crucial sectors, however be a world chief within the improvement of long-term, resilient, world crucial mineral provide chains.

Pradeep Karuturi is senior supervisor, coverage advocacy and analysis – electrical autos, OMI Foundation and Sameer Guduru, director, digital financial system and aerospace and defence, US-India Business Council. The views expressed are private.

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