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Mineral Diplomacy
Context:
As India strives to expand its manufacturing and technological capabilities, the demand for critical minerals has surged, making mineral security a national priority.
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- These essential resources, such as lithium and cobalt, are key to powering sectors like renewable energy, electric vehicles, and advanced electronics.
- However, India remains heavily reliant on imports, particularly from China, raising strategic concerns.
- Highlighting this challenge, Defence Minister Rajnath Singh recently pointed to the “weaponisation” of resources by certain nations, emphasising the need for India to address its mineral vulnerabilities.
- India’s mineral diplomacy aims to reduce dependence and boost autonomy through global collaborations and partnerships in the critical mineral supply chain.
Building Global Partnerships
- The first pillar of India’s mineral diplomacy focuses on developing bilateral ties with countries rich in critical minerals.
- Post-2019, the government established Khanij Bidesh India Ltd. (KABIL), a joint venture mandated to secure a consistent supply of strategic minerals through agreements and acquisitions.
- Australia: In March 2022, KABIL partnered with Australia in a critical mineral investment pact, targeting lithium and cobalt projects.
- Latin America: The Lithium Triangle of Argentina, Chile, and Bolivia has become a focal point.
- In January 2024, India signed a $24 million agreement with Argentina for lithium exploration across five brine blocks. Efforts are also underway to acquire assets in Bolivia and Chile.
- Central Asia: India has collaborated with Kazakhstan to form IREUK Titanium Limited, a joint venture for producing titanium slag.
- This aligns with India’s vision of establishing a Central Asia Rare Earths Forum to leverage the region’s resources.
- These bilateral initiatives have not only boosted government efforts but also opened doors for private players.
- For instance, Altmin Private Limited secured a raw material supply chain agreement for lithium-ion batteries in Bolivia.
Strengthening Multilateral Engagement
- The second pillar focuses on building India’s presence in global forums addressing critical mineral security.
- Through multilateral initiatives like the Quad, the Indo-Pacific Economic Framework for Prosperity (IPEF), and the Mineral Security Partnership (MSP), India aims to align itself with international best practices across the mineral supply chain.
- Collaborative agreements with partners such as the United States, the European Union, South Korea, and Australia facilitate knowledge sharing, capacity building, and policy alignment.
- For example, the Ministry of Mines signed an MoU with the International Energy Agency to streamline India’s policies and investment strategies in the critical minerals sector.
Challenges Hindering Progress
Despite the progress, India’s mineral diplomacy faces three significant hurdles:
- Limited Private Sector Involvement: The private sector’s role remains underutilised due to the absence of a clear supply chain strategy and roadmap.
- Weak Diplomatic Capacity: India lacks a dedicated framework for mineral diplomacy, which hampers its ability to effectively engage with global partners.
- Lack of Sustainable Partnerships: While bilateral agreements exist, there is a need for more strategic and trusted long-term collaborations, particularly with partners like the EU, South Korea, and Quad members.
Strengthening Mineral Diplomacy
To address these gaps, India must adopt a more comprehensive approach:
- Engage the Private Sector: A critical mineral supply chain strategy aligned with India’s growth and security priorities is essential. This will encourage private sector participation across the supply chain.
- Build Diplomatic Capacity: Establishing a dedicated mineral diplomacy division within the Ministry of External Affairs, akin to the New and Emerging Strategic Technologies (NEST) division, can bolster international engagement.
- Forge Sustainable Partnerships: India must focus on building trusted, long-term relationships with key global players. Enhanced collaboration with EU nations, South Korea, and Quad partners will be critical for advancing mineral security.
