The Quad and Critical Minerals Supply Chain
The Quad, which includes India, Australia, Japan, and the United States, has initiated efforts to secure supply chains for critical minerals due to concerns about China's dominance in this sector. These minerals are essential for new technologies.
Concerns and Actions
- The Quad expressed their deep concerns regarding the abrupt constriction and future reliability of key supply chains, especially for critical minerals.
- China's control over processing and refining critical minerals poses risks of economic coercion, price manipulation, and supply chain disruptions.
- The Quad established the Quad Critical Minerals Initiative to create alternative supply chains for these minerals, focusing on sectors like electric vehicles, electronics, and defense.
The initiative aims to:
- Enhance economic security and collective resilience.
- Secure and diversify reliable supply chains and promote electronic waste (e-waste) recovery.
- Coordinate with private sector partners to increase investments.
Importance of Critical Minerals
Critical minerals, including rare earth elements (REEs), are vital for various technologies like semiconductors, electric vehicles, and jet fighters. China currently holds a near monopoly over rare earth magnets, especially neodymium-iron-boron (NdFeB) magnets, essential for electric motors in EVs.
China's Restrictions
- China has created bureaucratic hurdles for foreign companies sourcing critical minerals.
- Exports of key rare earth metals have been restricted, impacting the US and India's industries.
- India's growing EV industry faces challenges due to these restrictions, as applications to source critical minerals from China remain unapproved.
Global Efforts and Collaborations
The Quad's initiatives follow the Critical Minerals Action Plan from the G7 Summit in Canada, with a focus on cooperation with mineral-rich countries to diversify supply chains.
- G7 countries pledged $25 million to the World Bank-led Resilient and Inclusive Supply Chain Enhancement (RISE) initiative.
- India's National Critical Mineral Mission (NCMM) aims to strengthen its critical minerals supply chain with an outlay of Rs 16,300 crore.
- The US and India enhanced cooperation through the TRUST initiative, focusing on key minerals' extraction and processing technologies.
Bilateral and Multilateral Relations
The US has shown increased focus on critical minerals due to their applications in industries like defense and aerospace, despite withdrawing from core energy transition sectors like EVs and solar.
- Executive orders from the US President aim to fast-track mining projects and secure domestic supply chains.
- The US and India deepened bilateral ties with agreements on technology development in critical minerals.
Conclusion
The Quad's initiative reflects a strategic move to counterbalance China's control over critical mineral supply chains, ensuring economic and national security for its member nations while fostering global cooperation in securing these essential resources.
