How ‘Critical’ is the India-Australia ‘Critical Minerals’ partnership?

Opinion piece by Kriti Bhardwaj [Minerals and Mining professional]

Image Credit: Australian Government: Department of Industry, Science and Resources

Last 15 months have been significant in formalising India’s attempts to secure supplies for critical minerals from Australia. One key milestone was reached when Australia and India announced a three-year critical minerals investment partnership to unlock mutual benefits from Australia’s leading critical minerals sector followed by a ministerial delegation visit to critical mineral companies and government agencies across the country. This article attempts to showcase the importance of this partnership and the need for furthering the momentum. India, the largest democracy of the world, has further affirmed its ambitious goals at the latest National Determined Contributions (NDCs) signed at COP27 in November 2022, by tightening the “Panchamrit” goals presented PM Modi at the COP26 in Glasgow in 2021. India has committed to reaching net-zero by 2070 with three key-highlights – 45% reduction of emissions intensity by 2030: 50% non-fossil fuel-based energy resources by 2030 and a global ‘Lifestyle for the Environment (LiFE) Movement’. Equally significantly, India is the fastest growing economy. India’s rate of GDP growth at 1 trillion dollars every three years, has taken it up from 10th position in 2014 to 5th position in 2022 and is expected to keep up with the trend for the foreseeable future. As such, India is poised to become a 5 trillion-dollar economy by FY 2027 according to the International Monetary Fund’s forecast.

To meet both the industrialreform and low-carbon megatrends, a pivotal building block will be to secure supplies

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along with developing processing and downstream refining capabilities of a bespoke set of ‘Critical Minerals’. Critical minerals are those minerals that are crucial inputs for a nation’s economic production processes, for which the supplies are likely to be at risk from non-availability or unfavourable price-curve.

A recent working paper from Centre for Social and Economic Progress (CSEP) extends the earlier minerals assessment for 23 minerals by assessing the criticality levels of 43 select minerals for India based on their economic importance (demandside factors) and supply risks (supply-side factors) which are determined through the evaluation of specific indicators. The outcomes of this projection exercise show that India lacks the capacity to satisfy its needs only through local mining. To achieve its policy agenda for climate change mitigation, imports of final products (included in these minerals) or minerals for domestic production will be critical.