India-US mineral supply chain

India has officially joined the Minerals Security Finance Network, which enhances cooperation among member nations to secure critical mineral supply chains

India has officially joined the Minerals Security Finance Network, a US-led initiative focused on enhancing cooperation among member nations to secure critical mineral supply chains.

Announced on 23 September at the United Nations General Assembly, this step brings 14 countries together. Along with them, the European Union will strengthen cooperation and secure supply chains for critical minerals.

The Mineral Security Finance Network (MSFN) is an offshoot of the Minerals Security Partnership (MSP), a framework established by the US in 2022.

Inducted in 2023, India has been working closely with MSP, marking a significant step towards ensuring resilient supplies of critical minerals. However, with this deal in play, the initiative aims to catalyze public and private investment in critical mineral supply chains globally.

The Reason Behind the Move

The main motive behind India's integration into the MSFN is due to its ambitious growth strategy, which relies heavily on electric vehicles and electronics manufacturing.

India's inclusion is crucial as it will help India drive growth by securing the supply of critical minerals, such as lithium, cobalt, nickel, and other rare earth minerals.

This is the need of the hour as currently, China dominates the global supply chain of these minerals, accounting for an estimated 70% of rare earth mineral production.

On this momentous partnership, US Undersecretary of State Jose W Fernandez noted, “The energy transition is at risk. We need more production capacity for critical minerals that need to come online – many of these supply chains are concentrated in one or two countries and lack resilience.”

Key Focus Areas of the Collaboration

  • Getting ⁠Lithium, Cobalt, and Nickel: These minerals are essential for batteries used in electric vehicles.
  • ⁠Rare Earth Minerals collection: Critical for semiconductors and high-end electronics manufacturing.
  • ⁠Battery Materials: Developing sustainable battery technologies.
  • ⁠Minerals Processing Facility: Jointly developing facilities in South America.

India’s Forward Strategy

By joining the MSFN, India is ensuring a growth pattern. This partnership will allow India to achieve its electric vehicle (EV) manufacturing goal of 2030.

India's growth strategy also relies heavily on electric vehicles and electronics manufacturing. This makes it essential to secure critical mineral supplies.