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INDIA-AUSTRALIA DEAL

UPSC CURRENT AFFAIRS | ELEMENTS AT CENTRE OF INDIA-AUSTRALIA DEAL | 08TH JULY | INDIAN EXPRESS

/ 2022, UPSC Daily Current Affairs

SYLLABUS SECTION:

WHY IN THE NEWS?

Recently, India-Australia decided to strengthen their partnership deal in the field of projects and supply chains for critical minerals.

MORE DETAILS

  • Australia confirmed that it would commit A$5.8 million to the three-year India-Australia deal Critical Minerals Investment Partnership.

THE MINERALS:

  • Critical minerals are elements that are the building blocks of essential modern-day technologies,
  • And are at risk of supply chain disruptions.
  • These are now use everywhere from making mobile phones, computers to batteries,
  • The electric vehicles and green technologies like solar panels and wind turbines.
  • Different countries create their own lists, which mostly include graphite, lithium and cobalt, which are use for making EV batteries.
  • Rare earths are use for making magnets and silicon which is a key mineral for making computer chips and solar panels.
  • Aerospace, communications and defence industries also rely on several such minerals as they are use in manufacturing fighter jets, drones, radio sets and other critical equipment.
WHY CRITICAL:
  • Countries around the world scale up their transition towards clean energy and digital economy, these critical resources are key to the ecosystem that fuels this change.
  • Any supply shock can imperil the economy and strategic autonomy of a country over-dependent on others to procure critical minerals.
  • These supply risks exist due to rare availability, growing demand and complex processing value chains.
  • The complex supply chain can be disrupted by hostile regimes, or due to politically unstable regions.
  • As the world transitions to a clean energy economy, global demand for these critical minerals is set to skyrocket by 400- 600 per cent over the next several decades, and, for minerals such as lithium and graphite used in electric vehicle (EV) batteries, demand will increase by even more—as much as 4,000per cent.
CONCERNS OVER CHINA
  • China is the world’s largest producer of 16 critical minerals.
  • China is responsible for some 70% and 60% of global production of cobalt and rare earth elements, respectively, in 2019.
  • The level of concentration is even higher for processing operations. China’s share of refining is around 35% for nickel, 50-70% for lithium and cobalt, and nearly 90% for rare earth elements.
  • In 2010, China suspended rare earth exports to Japan for two months over a territorial dispute.
ADDRESSING THE CONCERNS:
  • India has set up KABIL or the Khanij Bidesh India Limited, a joint venture of three public sector companies, to ensure a consistent supply of critical and strategic minerals to the Indian domestic market.
  • Australia’s Critical Minerals Facilitation Office (CMFO)and KABIL had recently signed an MoU aimed at ensuring reliable supply of critical minerals to India.
  • the US, Canada and
  • Australia launched an interactive map of critical mineral deposits with an aim to help governments to identify options to diversify their critical minerals sources.

Read more: UPSC CURRENT AFFAIRS

SOURCE: INDIAN EXPRESS