India joins US-led critical mineral club

Context

Recently, India joined Mineral Security Partnership (MSP), a US-led collaboration that aims to catalyse public and private investment in critical mineral supply chains globally.

• The MSP includes Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, UK, the European Commission, Italy, and now India.

About Minerals Security Partnership (MSP):

• It will focus on the supply chains of minerals such as Cobalt, Nickel, Lithium and also the 17 ‘rare earth’
• The alliance is seen as primarily focused on evolving an alternative to China, which has created processing infrastructure in rare earth minerals and has acquired mines in Africa for elements such as Cobalt.
• Goal:
• The goal of the MSP is to ensure that critical minerals are produced, processed, and recycled in a manner that supports the ability of countries to realize the full economic development benefit of their geological endowments.
• This grouping is aimed at catalysing investment from governments and the private sector to develop strategic opportunities.
• Need: Demand for critical minerals, which are essential for clean energy and other technologies, is projected to expand significantly in the coming decades.
• Significance: 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.

What are rare earth elements?

• There are 17 Rare Earths are cerium (Ce), dysprosium (Dy), erbium (Er), europium (Eu), gadolinium (Gd), holmium (Ho), lanthanum (La), lutetium (Lu), neodymium (Nd), praseodymium (Pr), promethium (Pm), samarium (Sm), scandium (Sc), terbium (Tb), thulium (Tm), ytterbium (Yb), and yttrium (Y).
• REEs are classified as light RE elements (LREE) and heavy RE elements (HREE).
• Some REEs are available in India — such as Lanthanum, Cerium, Neodymium, Praseodymium and Samarium, etc.
• Others such as Dysprosium, Terbium, and Europium, which are classified as HREEs, are not available in Indian deposits in extractable quantities.

Reason for India to join MSP:

• To find alternative of China: The proposal for India to become a part MSP comes after a strong diplomatic push at reducing dependency on China for securing critical minerals.
• To break the increasing monopoly: As China is a strong player in the critical mineral space and has created processing infrastructure in rare earth minerals and has also acquired mines in Africa for sourcing elements such as cobalt, has become a concern for other countries.

India’s position on Critical minerals:

• Though India has 6% of the world’s rare earth reserves, it only produces 1% of global output, and meets most of its requirements of such minerals from China.
• In 2018-19, for instance, 92% of rare earth metal imports by value and 97% by quantity were sourced from China.
• In India, monazite and thorium is the principal source of rare earths.

Indian Rare Earths Ltd (IREL) which is a Government of India Undertaking, and KMML, a Kerala State Government Undertaking are actively engaged in mining and processing of beach sand minerals from placer deposits.

 Major concerns globally and for India:

• Dependence on China: If India is not able to explore and produce these minerals, it will have to depend on other countries, including China, to power its energy transition plans to electric vehicles.
• Lack of Expertise: the reason India would not have found a place in the Minerals Security Partnership grouping is because the country does not bring any expertise to the table.
• Difficult to mine: Although they are more abundant than their name implies, they are difficult and costly to mine and process cleanly.
• Monopoly of few: Most of the reserves being present in few nations causes problems for most of the world because of the concentration of reserves in the hands of few countries.
• Supply Chain: Forming forward and backward supply chains will create problems when the reserves are mostly limited to one country.
• Environmental Impact: The chief concern is that the rare earth elements are bound up in mineral deposits with the low-level radioactive element thorium, exposure to which has been linked to an increased risk of developing lung, pancreatic, and other cancers.
• Capital-Intensive: The mining and extraction processes are capital-intensive and consumes large amounts of energy.
• Health hazards: The mining of these minerals releases toxic by-products which are harmful for the environment and human health.

Laws related to mining and Rare earth metals: Ministry of Mines has amended Mines and Minerals (Development and Regulation) (MMDR) Act, 1957 through the Mines and Minerals (Development and Regulation) Amendment Act, 2021 for giving boost to mineral production, improving ease of doing business in the country and increasing contribution of mineral production to Gross Domestic Product (GDP). The amendment act provides that no mine will be reserved for particular end-use.

 Future of rare earth for India:

• Electric Vehicles: India has an ambitious plan to convert a large percentage of its transport to electric and this would require these minerals.
  • 80 percent of the country’s two- and three-wheeler fleet, 40 percent of buses, and 30 to 70 per cent of cars will be EVs by 2030.
• Clean energy: They are critical for developing clean energy which is the need of the hour today.
• Industrial use: Traditional uses like Cerium for glass polishing and lanthanum for car catalysts or optical lenses.
• Manufacturing of magnets: neodymium, praseodymium and dysprosium, are crucial to the manufacture of magnets which are used in industries and also in wind turbines and Drones.