QUAD's strategic role in shaping a robust critical mineral supply chain in the Indo-Pacific

The critical mineral supply chain in the Indo-Pacific is undergoing transformative changes through new deals, reforms, and negotiations facilitated by the strategic partnership of QUAD.

Pracheta Acharya Jan 31, 2024
Critical minerals and Quad leaders

The global demand for critical minerals is at an unprecedented high, fuelled by the surge in clean energy initiatives, technological advancements, and the needs of essential sectors such as defence, telecommunications, information technology, and healthcare. However, the supply of these crucial minerals often falls short, posing a significant challenge to the sustainable development of key industries worldwide. In this context, the Quadrilateral Security Dialogue (QUAD) countries – India, USA, Japan, and Australia – emerge as pivotal players with the potential to reshape the critical mineral supply chain in the Indo-Pacific region.

Two overarching issues define the challenges associated with the critical minerals supply side. Firstly, the geographical concentration of production and availability leaves the supply chain vulnerable to disruptions caused by political uncertainties and distorted trade policies. For instance, the Democratic Republic of Congo mines 69 percent of global cobalt, Indonesia 33 percent of nickel, and China dominates Rare Earth Elements[i]. Export restrictions imposed by China on gallium and germanium, along with a graphite ban in 2023, have further heightened concerns about the stability of the global market[ii]. Secondly, despite the soaring demand, critical minerals are not being optimally utilised, with many ending up as discarded tailings. This inefficiency calls for a comprehensive approach that addresses both the supply chain disruptions and the underutilisation of these vital resources[iii].

The QUAD countries have individually taken significant steps to tackle these challenges, demonstrating their commitment to building a resilient critical mineral supply chain. Notable efforts include the creation of open markets, international negotiations, and the sharing of technology and knowledge.

India opens mining to private players

India, for example, has amended its mining laws to open up mines to private players, permitting them to mine previously reserved minerals such as lithium, beryllium, niobium, titanium, tantalum, and zirconium[iv].The e-auction of 20 mineral blocks in 2023, and the recent announcement for the auction of 100 onshore along with 15 offshore critical mineral blocks, signifies a progressive approach to building a robust supply chain[v]. Additionally, the mines ministry's new rules prevent bid monopoly, allowing only one bid per applicant and barring affiliates from the same auction to promote competitiveness[vi].

Recognising the small market size compared to other minerals such as coal, iron and coppers, QUAD countries have incentivised private players. India has granted a 25 percent incentive on exploration project costs[vii], Japan has covered 50 percent for lithium projects[viii], and Australia has planned to double the financing for critical minerals, making it to AUD$2 billion in 2023[ix]. A similar stance was taken by the USA in 2022 where the government announced USD$675 million under the Bipartisan Infrastructure Law Programme for the expansion of the domestic critical mineral supply chain. In the same year, the government announced additional funding of USD$156 million to develop a critical minerals refinery[x].

Global approach by QUAD natons

Furthermore, strategic international collaborations play a vital role in securing the supply of critical minerals. India's engagement with Australia and its participation in the US-led Minerals Security Partnership (MSP) exemplify the global approach taken by QUAD countries. Joint ventures, like Khanji Bidesh India Ltd., demonstrate the potential for collaboration between public and private entities to secure mineral acquisition[xi]. Australia's expansion into African countries, as seen in the lithium deal with Ghana, highlights the QUAD's interest in unlocking global reserves[xii]. However, careful examination of historical exploitation loopholes is essential to ensure fair deals with the host countries.

Critical mineral refining is highly concentrated, with China dominating the cobalt, lithium, and manganese refining markets. QUAD's technology-sharing platform, exemplified by the recent India-US collaboration[xiii], aims to develop refining processes in the Indo-Pacific, fostering competitiveness and diversification. The individual Memorandum of Understandings signed by Monash University (Australia) with the Indian Institute of Technology Hyderabad and with the International Centre for Excellence in Mining Safety and Automation in Gujarat, India[xiv], are noteworthy progress in building a vast global knowledge network in the critical mineral domain.   

Australia, with its robust environmental standards and technology, must learn from countries like Sweden and South Africa in utilising mine waste and byproducts from discards to extract critical minerals. The potential to tap into five million tonnes of copper in Australian tailings[xv] waste could set a model for QUAD countries, provided cost feasibility is thoroughly explored.

Transformative changes happening

The critical mineral supply chain in the Indo-Pacific is undergoing transformative changes through new deals, reforms, and negotiations facilitated by the strategic partnership of QUAD. The future landscape looks promising as QUAD countries actively push for global discussions on favourable trade, investment, and policy coordination, thereby strengthening the Asia-Pacific region's position in the MSP. The collective efforts of QUAD nations are not only reshaping the critical mineral supply chain but also laying the foundation for a sustainable and resilient future in the face of increasing global demands.

(The author is a Research Associate at CUTS International, a global policy think-tank and advocacy group. Views are personal. She can be contacted at pah@cuts.org)

[i] Chadha, R. Sivamani, G. and Bansal, K. (2023). Assessing the Criticality of Minerals for India: 2023 (CSEP

Working Paper 49). New Delhi: Centre for Social and Economic Progress.

[ii] “China, world's top graphite producer, tightens exports of key battery material”, Reuters, October 21, 2023, https://www.reuters.com/world/china/china-require-export-permits-some-graphite-products-dec-1-2023-10-20/.

[iii] Yellishetty Mohan, “Australia has rich deposits of critical minerals for green technology. But we are not making the most of them yet” The Conversation (UK), May 11, 2022, https://theconversation.com/australia-has-rich-deposits-of-critical-minerals-for-green-technology-but-we-are-not-making-the-most-of-them-yet-182331.

[iv] “Parliament Passes Mines and Minerals (Development & Regulation) Amendment Bill, 2023”, Press Information Bureau, August 02, 2023, https://pib.gov.in/PressReleasePage.aspx?PRID=1945102.

[v] Anand Sourav, “India gears up for major mineral auction”, ET Energy World (New Delhi), December 20, 2023, https://energy.economictimes.indiatimes.com/news/coal/india-gears-up-for-major-mineral-auction-100-blocks-by-february-2024-15-offshore-by-march/106138582.

[vi] Mishra Twesh, “Centre notified mineral auction rules to cap upfront payments”, The Economic Times (New Delhi), January 22, 2024, https://economictimes.indiatimes.com/industry/indl-goods/svs/metals mining/centre-notified-mineral-auction-rules-to-cap-upfront payments/articleshow/107057544.cms?from=mdr.

[vii] “Ministry of Mines Year End Review 2023”, Press Information Bureau, December 29, 2023, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1991445#:~:text=(vi)%20NMET%20has%20announced%20an,critical%20minerals%20and%20fertilizer%20minerals.

[viii] “Japan to subsidize half of costs for lithium and key mineral projects”, Nikkei Asia, April 23, 2023, https://asia.nikkei.com/Economy/Japan-to-subsidize-half-of-costs-for-lithium-and-key-mineral-projects.

[ix] “$2 billion critical minerals boost crucial to energy transition”, Australian Ministry of Resources, October 24. 2023, https://www.pm.gov.au/media/2-billion-critical-minerals-boost-crucial-energy-transition.

[x] Clean Energy Infrastructure, Infrastructure News, 2022, https://www.energy.gov/infrastructure/listings/infrastructure-news?page=1.

[xi] “KABIL to ensure consistent supply of critical, strategic minerals to domestic market”, ET Government, December 12, 2023, https://government.economictimes.indiatimes.com/news/economy/kabil-to-ensure-consistent-supply-of-critical-strategic-minerals-to-domestic-market-minister/105917066.

[xii] “Ghana greenlights first lithium mine with an eye on electric vehicle boom”, Reuters, October 19, 2023, https://www.reuters.com/world/africa/ghana-greenlights-first-lithium-mine-with-eye-electric-vehicle-boom-2023-10-19/.

[xiii] Vishnoi Anubhuti, “India, US working on tech to process critical minerals”, The Economic Times (New Delhi), January 13, 2024, https://economictimes.indiatimes.com/news/economy/foreign-trade/india-us-working-on-tech-to-process-critical-minerals/articleshow/106783734.cms?from=mdr.

[xiv] “Australia-India Critical Minerals Research Hub established furthering sustainable mining practice”, Monash University, November 08, 2023, https://www.monash.edu/news/articles/australia-india-critical-minerals-research-hub-established-furthering-sustainable-mining-practice.

[xv] Burton Melanie, “Miners tap waste for critical minerals”, Reuters (Brisbane), June 28, 2023, https://www.reuters.com/sustainability/miners-tap-waste-critical-minerals-2023-06-28/.

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