India's Critical Mineral Acquisition Plans in Africa | 27 May 2024

Source: BL

Why in News?

India is stepping up its critical mineral acquisition plans in Africa, challenging China's dominant position in the region.

• The race for critical minerals is a key focus, with India securing mining collaborations and access agreements with several African nations.

Why is India Stepping Up its Critical Mineral Acquisition Plans in Africa?

• Resource Securitisation: Ensure a stable and reliable supply of critical minerals for India's domestic industries, particularly the growing electric vehicle (EV) and renewable energy sectors.
  • Reduce dependence on imports and mitigate potential supply chain disruptions.
  • Support the country's push towards self-reliance and strategic autonomy in critical sectors.
• Countering China's Dominance: China is estimated to control over 5% of cobalt processing facilities in the Democratic Republic of Congo (DRC).
  • Chinese companies are estimated to own 80% of the Tenke Fungurume mines, which produce nearly 12% of the world's cobalt resource.
    • China has also made substantial investments in securing lithium resources in Zimbabwe.
  • India aims to establish a stronger presence in the African mining sector to counterbalance China's influence.
• Access to High-Quality Reserves:
  • Africa holds significant reserves of critical minerals like cobalt, copper, lithium, and rare earth elements.
    • Over 30% of the world's critical mineral deposits are found in Africa, presenting an opportunity for African countries to become major global suppliers and trade among themselves.
    • Acquire access to high-quality and economically viable mineral deposits to meet India's growing demand.
  • Leverage Africa's mineral wealth to support India's industrial and technological aspirations.
• Strengthening Bilateral Ties: India is leveraging government-to-government (G2G) negotiations to secure mining collaborations and access agreements with African nations.
  • India has signed MoUs with South Africa, Mozambique, Congo, Tanzania, Zambia, Malawi, the Republic of Cote d’Ivoire, and Zimbabwe.
  • This helps India build stronger diplomatic and economic ties with countries in the region.
  • A Confederation of Indian Industry (CII) report stated that Indian investments in Africa could reach USD 150 billion by 2030. It noted that since April 1996, India has invested USD 74 billion in Africa.

What are India's Other Overseas Critical Mineral Acquisition Plans?

• Khanij Bidesh India Ltd (KABIL): It is a joint venture of National Aluminium Company Ltd (NALCO), Hindustan Copper Ltd (HCL), and Mineral Exploration and Consultancy Ltd (MECL) the Central Public Sector Enterprises (CPSEs) under the Ministry of Mines.
  • It aims to source and process strategic minerals from foreign sources, particularly focusing on battery minerals for supply in India.
• Coal India Limited (CIL): It is targeting the acquisition of lithium, cobalt, and nickel assets abroad, as it aims to diversify its operations beyond its core coal business.
  • CIL has amended its Memorandum of Association to include non-ferrous and critical minerals.
• Minerals Security Partnership (MSP): India joined the Mineral Security Partnership (MSP) in June 2023, making it the 14^th member alongside countries like the United States, Australia, Canada, and others.
  • India seeks to leverage this framework to aid Indian public sector undertakings (PSUs) in acquiring critical mineral assets abroad.
  • Established in 2022, MSP aims to build reliable supply chains through collaboration between governments and industry, providing diplomatic and financial aid for strategic projects along the value chain.
• Supply Chain Resilience initiative (SCRI): Collaboration with Australia and Japan aimed at ensuring supply chain resilience for critical minerals.
• Australian Partnership: India signed the Critical Minerals Investment Partnership with Australia to invest in critical minerals projects.
• Global Collaborations: India is collaborating with countries like Chile, Argentina, and Bolivia, known for their significant lithium resources.
  • India is in talks with Sri Lanka to acquire a graphite mine block, as part of its plan to secure critical mineral supplies globally.
    • Graphite is crucial for India as it is used in battery manufacturing. The Sri Lankan graphite is considered among the purest in the world, with over 98% carbon content.

What Initiatives have Prompted India to Secure Critical Minerals?

• Panchamrit Vision: India's commitment to climate change mitigation includes growing non-fossil fuel energy capacity to 500 GW by 2030 and achieving Net Zero emissions by 2070.
• Strategic Initiatives:
  • Planning Commission (2011): Highlighted the need for strategic mineral resources.
  • Expert Committee (2019): Focused on cobalt and lithium sourcing from Australia, Argentina, and Bolivia.
• Geological Survey of India (GSI): Focused on finding new resources through advanced exploration techniques.
• MMDR Amendment Act, 2023: The Mines and Minerals (Development and Regulation) Amendment Act, 2023, amend the Mines and Minerals (Development and Regulation) Act, 1957, to strengthen the exploration and extraction of critical minerals essential for India's economic development and national security.
• Offshore Area Minerals (Development And Regulations) Amendment Act, 2023: It regulates the mining of minerals in the maritime zones of India, categorising activities into reconnaissance, exploration, and production.

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