Rare earth elements and push for inclusion in supply partnership

GS paper 2 and 3

Syllabus: Rare earth elements, critical mineral supply chain, global grouping etc

Directions: UPSC may ask about rare earth elements, global supply chain, geographical distribution etc

Source: Indian Express

Context:

• As part of a global ‘China-plus-one’ strategy adopted post the Covid-19 pandemic that caused massive supply-chain disruptions, a group of western nations are cooperating to develop alternatives to China to ensure key industrial supplies.
• A new US-led partnership initiative of 11 nations aims to bolster critical mineral supply chains.
• India is not part of this arrangement called the Minerals Security Partnership (MSP) but is working through diplomatic channels to fetch an entry.

Minerals Security Partnership (MSP):

• The US and 10 partners — Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea (South Korea), Sweden, the United Kingdom, and the European Commission have come together to form the MSP.
• Catalyzing investment from governments and the private sector: The new grouping is aimed at catalyzing investment from governments and the private sector to develop strategic opportunities.
• Focus on the supply chains of minerals: The new grouping, industry insiders say, could focus on the supply chains of minerals such as Cobalt, Nickel, Lithium, and also the 17 ‘rare earth’ minerals.

Rare earth elements:

• The 17 rare earth elements (REE) include the 15 Lanthanides (atomic numbers 57 — which is Lanthanum — to 71 in the periodic table) plus Scandium (atomic number 21) and Yttrium (39). REEs are classified as light RE elements (LREE) and heavy RE elements (HREE).
• Some REEs are available in India — such as Lanthanum, Cerium, Neodymium, Praseodymium and Samarium, etc. Others such as Dysprosium, Terbium, and Europium, which are classified as HREEs, are not available in Indian deposits in extractable quantities.
• Hence, there is a dependence on countries such as China for HREEs, which is one of the leading producers of REEs, with an estimated 70 per cent share of the global production.

Why are these minerals important?

• Used in electric vehicles: Minerals like Cobalt, Nickel, and Lithium are required for batteries used in electric vehicles.
• Used in consumer products: REEs are an essential — although often tiny — component of more than 200 consumer products, including mobile phones, computer hard drives, electric and hybrid vehicles, semiconductors, flatscreen TVs and monitors, and high-end electronics.
• India’s shift to clean energy: India is seen as a late mover in attempts to enter the lithium value chain, coming at a time when EVs are predicted to be a sector ripe for disruption.
  • According to the plan, 80 percent of the country’s two- and three-wheeler fleet, 40 percent of buses, and 30 to 70 per cent of cars will be EVs by 2030.

What is India’s major concern at this moment?

• Dependence on China: If India is not able to explore and produce these minerals, it will have to depend on a handful of countries, including China, to power its energy transition plans to electric vehicles.
• Lack of expertise: Industry watchers say that the reason India would not have found a place in the MSP grouping is because the country does not bring any expertise to the table.
• Reserves and technology: In the group, countries like Australia and Canada have reserves and also the technology to extract them, and countries like Japan have the technology to process REEs.

Practice Questions:

Q. The USA is facing an existential threat in the form of China, that is much more challenging than the erstwhile Soviet Union.” Explain(UPSC 2021)