India has officially joined the US-led Minerals Security Finance Network, an initiative designed to enhance global cooperation in securing critical mineral supply chains. The announcement, made by the US State Department on Monday, underscores the growing significance of critical minerals in the global energy transition as countries work to decrease their reliance on fossil fuels.
This move comes amid concerns over China’s dominance in the supply of critical minerals, raising issues about the concentration and resilience of global supply chains. “The energy transition is at risk,” stated Undersecretary of State Jose W. Fernandez during the United Nations General Assembly in New York. “We need more production capacity for critical minerals, which are concentrated in one or two countries and lack resilience,” he added.
What is the Minerals Security Finance Network?
The Minerals Security Finance Network is a new initiative that evolved from the Minerals Security Partnership (MSP), a framework established by the US in 2022. The network aims to unite institutions from the Indo-Pacific region and Europe, fostering cooperation, information sharing and co-financing. These critical minerals are essential for producing renewable energy technologies, such as electric vehicle batteries, solar panels and wind turbines, all crucial for the global shift towards clean energy. The US Department of State and the SAFE Center for Critical Minerals Strategy announced the establishment of the network at the UN General Assembly, bringing together development finance institutions (DFIs) and export credit agencies (ECAs) from MSP partner governments.
Which countries are part of this initiative?
The partnership includes 13 countries along with the European Commission, comprising the United States, Australia, Canada, Estonia, Finland, France, Germany, India, Italy, Japan, South Korea, Norway, Sweden, the United Kingdom and the European Union.
India’s involvement in this initiative aims to diversify and secure its supply of critical minerals from countries like Argentina, Chile, Australia, and select African nations. Kazakhstan in Central Asia is also being explored as a potential source for India’s mineral needs.
India’s critical mineral ambitions
Joining the US-led network marks a significant step for India in its efforts to reduce reliance on China for these essential minerals. The initiative will help India build a robust, self-sustaining supply chain for its green energy initiatives.
