UPSC Editorial Analysis: Critical Minerals and India-Africa Cooperation
Kartavya Desk Staff
Source: The Hindu
*General Studies-2; Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.*
Introduction
• In the Union Budget 2024-25, the Union Finance Minister announced the creation of a Critical Mineral Mission to secure India’s critical minerals needs. This is vital for industries such as renewable energy and advanced technologies, where critical minerals like lithium, cobalt, and rare earth elements play an essential role.
• India also marked a significant milestone by signing its first major lithium exploration and mining agreement with Argentina in January 2024. These developments highlight the increasing focus on critical minerals, driven by the global shift towards clean energy and India’s economic security.
Background
• India has limited domestic production and processing capabilities for many critical minerals. To overcome this, the Indian government is focusing on three primary strategies:
• Expanding domestic production.
• Prioritizing the recycling of critical minerals.
• Incentivizing overseas acquisition of assets.
• Africa, which holds 30% of the world’s known critical mineral reserves, emerges as a key partner for India’s mineral security. The continent’s vast reserves, coupled with India’s historic and economic connections with African nations, present opportunities for a mutually beneficial partnership.
India-Africa Partnership
• India shares deep and longstanding ties with Africa, strengthened by diplomatic, economic, and cultural exchanges. India’s investments in Africa have surpassed $75 billion, with a significant portion focused on energy assets. Additionally, India’s three million-strong diaspora in Africa has fostered commercial networks, further enhancing economic ties.
• The expansion of new diplomatic missions across Africa signifies India’s growing commitment to deepen these ties.
• By focusing on critical minerals, India can add a new dimension to its partnership with African nations.
Challenges and Opportunities
• While India looks to Africa for securing critical minerals, it faces challenges from China’s dominant position in the global critical minerals value chain.
• China has secured early control over mining, processing, and manufacturing, especially in cobalt mining in the Democratic Republic of Congo (DRC), with significant economic leverage through minerals-for-infrastructure deals. This poses an economic and security risk for India, which must diversify its supply chains and reduce dependence on any single country.
• However, African countries are seeking to diversify their partnerships. Moving away from a ‘pit-to-port’ model, nations like Tanzania, Zimbabwe, and Ghana are increasingly focusing on value addition and local processing.
• This shift presents opportunities for India to engage in building mining-adjacent infrastructure, such as railways and processing plants, leveraging its expertise in infrastructure development across 43 African countries.
• India can also draw upon its tech start-ups that offer innovative solutions for mining exploration, extraction, and beneficiation.
• Indian companies are well-positioned to assist African nations in developing sustainable and eco-friendly mining practices, enhancing efficiency while minimizing environmental impact.
Capacity Building Initiatives
• India has already laid the groundwork for collaboration in the critical minerals sector through Memoranda of Understanding (MoUs) with Zambia and Zimbabwe. These MoUs focus on geological mapping, mineral deposit modelling, and capacity building.
• Through the Indian Technical and Economic Cooperation (ITEC) program, India has trained 40,000 Africans over the past decade, building capacity across sectors. The program offers an opportunity to train a critical minerals workforce in Africa, supporting local expertise in mining and processing.
• India’s expertise in mining technology and responsible mining practices can be shared with African nations to promote sustainable development and secure long-term mineral supplies.
Government Schemes
To strengthen its mineral security, India has undertaken several key initiatives:
• Critical Mineral Mission: Aims to expand domestic production of critical minerals while securing overseas supplies through strategic partnerships.
• Amendment to the Mines and Minerals (Development and Regulation) Act, 1957: The 2023 amendment allows private sector exploration of six minerals that were previously restricted. This opens up new opportunities for private investment in the critical minerals sector.
• Khanij Bidesh India Limited (KABIL): Established to secure overseas critical mineral supplies. KABIL’s agreement for lithium mining in Argentina in 2024 marks a significant milestone in this effort.
• International Solar Alliance (ISA): India has benchmarked $2 billion for solar projects in Africa, reflecting its commitment to renewable energy partnerships.
International Best Practices
India can also learn from African countries’ best practices in minerals policy. For instance:
• Tanzania is developing a multi-metal processing facility to add value to raw minerals domestically.
• Zimbabwe and Namibia have banned the export of raw minerals to ensure value addition and boost local industries.
• Ghana has introduced a new policy for the exploitation and management of green minerals, aligning with global sustainability goals.
The African Green Mineral Strategy also promotes minerals-based industrialization, providing an opportunity for India to align its Critical Mineral Mission with Africa’s developmental objectives.
Way Forward
To secure critical mineral supplies and support Africa’s developmental goals, India should take the following steps:
• Leverage existing partnerships: Strengthen relationships with African nations, especially in mining and mineral processing, through trade, investment, and capacity building.
• Support Africa’s developmental agenda: Align India’s mineral sourcing efforts with Africa’s goals of value addition and responsible mining practices.
• Enhance mining operations: Utilize India’s expertise in infrastructure development and technology to enhance the efficiency of mining operations in Africa.
• Prioritize skill development: Build capacity through training programs that equip the African workforce with the necessary skills in the critical minerals sector.
Conclusion
By working together, India and Africa can build a sustainable and mutually beneficial partnership in the critical minerals sector, securing mineral resources for future technological and economic growth while supporting Africa’s industrialization.
Practice Question:
“With China dominating the global value chain of critical minerals, India’s reliance on external sources poses economic and security risks. In this context, critically examine the role of Africa as a key partner for India’s Critical Mineral Mission and highlight the opportunities and challenges in strengthening India-Africa cooperation in the mining sector.” (250 words)