Current Affairs : 8-December-2023
In a move signaling strategic foresight and economic preparedness, India has put twenty blocks of critical minerals up for auction for commercial mining by the private sector. The bidding process, initiated on November 29, is open until January 22 of the following year. This development, falling under the purview of GS III – Indian Economy, holds significance on the global stage.
What are Critical Minerals?
Critical minerals are elemental components crucial for contemporary technologies, encompassing everything from mobile phones and computers to batteries, electric vehicles (EVs), and green technologies such as solar panels and wind turbines. The varied usage extends to aerospace, communications, and defense industries, where these minerals are integral to manufacturing essential equipment like fighter jets, drones, and radio sets.
Key Elements:
- Graphite, lithium, and cobalt: Crucial for EV batteries.
- Rare earths: Essential for magnets.
- Silicon: Key for computer chips and solar panels.
Why is this Resource Critical?
As the global shift towards clean energy and a digital economy gains momentum, critical minerals emerge as linchpins in the ecosystem driving this transformation. The vulnerability stems from their rarity, increasing demand, and the intricate processing value chain, which can be disrupted by geopolitical tensions or politically unstable regions. Any supply shock can have profound implications for a country overly reliant on external sources for these vital resources.
Supply Risks:
- Rare availability.
- Growing demand.
- Complex processing value chain.
China’s Dominance and the ‘Threat’:
China emerges as a key player, being the world’s largest producer of 16 critical minerals. It holds a staggering 70% and 60% share in global cobalt and rare earth element production, respectively, as of 2019. China’s control extends to processing operations, with a significant presence in refining for nickel, lithium, cobalt, and rare earth elements. The historical example of China suspending rare earth exports to Japan in 2010 due to a territorial dispute highlights the potential leverage it holds over critical mineral supplies.
China’s Monopoly:
- Dominance in global production.
- Control over refining operations.
- Historical use of mineral exports as leverage.
Global Responses and Strategies:
Countries worldwide are actively addressing the challenges posed by the concentration of critical mineral production in China.
National Initiatives:
- The United States focuses on expanding domestic mining, production, processing, and recycling.
- India establishes KABIL to ensure a consistent supply of critical minerals.
- Australia’s CMFO collaborates with KABIL to secure a reliable supply to India.
- The UK unveils the Critical Minerals Intelligence Centre to study future demand and supply.
Collaborative Efforts:
- International cooperation to diversify sources.
- MoUs for reliable supply chains.
Important Points:
- What are Critical Minerals?
- Elemental components for modern technologies.
- Used in mobile phones, computers, batteries, EVs, and green technologies.
- Integral to aerospace, communications, and defense industries.
- Key Elements:
- Graphite, lithium, and cobalt for EV batteries.
- Rare earths for magnets.
- Silicon for computer chips and solar panels.
- Why is this Resource Critical?
- Crucial for the global shift to clean energy and the digital economy.
- Vulnerability due to rarity, increasing demand, and complex processing.
- Supply shocks can impact economies and strategic autonomy.
- Supply Risks:
- Rare availability.
- Growing demand.
- Complex processing value chain.
- China’s Dominance and the ‘Threat’:
- China is the world’s largest producer of 16 critical minerals.
- Controls 70% of cobalt and 60% of rare earth element production.
- Historical use of mineral exports as leverage in geopolitical disputes.
- China’s Monopoly:
- Dominance in global production.
- Control over refining operations.
- Historical use of mineral exports as leverage.
- Global Responses and Strategies:
- U.S. focuses on expanding domestic mining, production, and recycling.
- India establishes KABIL for a consistent supply.
- Australia’s CMFO collaborates with KABIL for reliable supply to India.
- UK unveils Critical Minerals Intelligence Centre to study future demand and supply.
- Collaborative Efforts:
- International cooperation to diversify sources.
- MoUs for reliable supply chains.
Why In News
Twenty blocks of critical minerals are currently on auction for commercial mining by the private sector. The bidding process began on November 29, and bids can be submitted until January 22 next year, showcasing a pivotal opportunity for industries to secure a stable supply of essential minerals critical for technological advancements and economic development.
MCQs about Critical Mineral Auctions
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What is the primary purpose of India auctioning 20 blocks of critical minerals?
A. To reduce global mineral production
B. To secure a stable supply chain for essential resources
C. To limit the usage of critical minerals in green technologies
D. To promote the export of critical minerals
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Why are critical minerals considered vital in the context of the global shift to clean energy and digital economies?
A. Due to their abundance in nature
B. Because they are inexpensive to extract
C. They are integral to the ecosystem driving the transformation
D. They have limited applications in modern technologies
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What is the significance of China’s dominance in critical mineral production ?
A. It ensures global resource sustainability
B. It highlights China’s commitment to environmental initiatives
C. It poses a potential threat to global supply chains
D. It indicates China’s efforts to share resources with other nations
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How are countries responding to the challenge of concentrated critical mineral production in China?
A. By reducing the usage of critical minerals
B. By increasing dependence on China for mineral supply
C. Through initiatives like domestic mining, production, and international collaborations
D. By relying solely on diplomatic negotiations
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